In this paper, a conceptual study and quantification of using a thermophotovoltaic system (TPV) to convert incident radiation on furnace panels to electrical energy is presented. In typical electric arc furnaces (EAF), a considerable amount of energy is wasted during the melting process, that is, steel enthalpy, off‐gas extraction, vessel cooling, slag enthalpy, and others. Although a remarkable share of the energy is wasted in circulating water, the contained exergy is simply too low to be considered for heat recovery (under 0.5% of input exergy) in comparison to energy content of the extracted gasses and slag. In the performed study, a TPV power output is calculated as a function of arc length, slag and bath height, zone temperatures, and emissivities. Two major changes to the existent EAF model were performed in order to estimate the TPV efficiency, that is, 1) the radiative heat transfer module has been re‐developed to allow calculation of the incident radiation on the TPV, 2) the model has been extended with a TPV module, which is used to estimate the electricity produced by the TPV. The effects of TPV capacity, its distance from the slag layer and input regime on generated electrical energy are studied. The results have shown that a typical EAF, equipped with TPV system, can reduce average energy consumption by 4.8 kWh ton−1, which corresponds to approximately 0.8% overall efficiency improvement. Moreover, the capacity factor of the installed TPV is predicted at 54% over a period of one year.