Algal biofuel has a potential for reducing dependence on fossil fuel while curbing CO2 emissions. Despite these potential benefits, a scalable, sustainable, and commercially viable system has not yet been developed due to the high production cost. Currently harvesting and dewatering accounts for 30-50% of the total cost. In this study, a new harvesting method was proposed that uses a heat exchanger along with low grade waste heat in flue gas and heats the algal suspension and subsequently evaporates the water inside an evaporation tank. The CO2 contained in the flue gas stream after cooling can be used as feedstock for algae cultivation. To fully develop and demonstrate the proposed method, four major objectives were completed to evaluate the performances of heat exchanger and evaporation tank, their impact on the extracted lipid and the economy of the method. The proposed system was analyzed experimentally and computationally with Ansys Fluent to investigate the temperature rise in a heat exchanger and evaporation rate in the tank. Unlike the properties of algal suspension and heat exchanger tube walls, flue gas properties such as flowrate, temperature and thermal conductivity had the major impact on overall heat transfer coefficient. The overall heat transfer coefficient and evaporation rate estimated with different theoretical methods showed a relatively acceptable agreement with the computational results. The results showed an increase of about 100% and 85% in evaporation rate when the flue gas temperature and air speed increased from 175⁰C to 245⁰C and from zero to 3.5 m/s, respectively. The effects of experiment duration, storage volume and vacuum evaporation were also evaluated experimentally. Next, the yield and quality of lipid were investigated by comparing lipid and fatty acid methyl esters (FAMEs) concentrations in samples harvested by the proposed method and centrifugation. FAME extraction showed a 17% net increase in the sample harvested by the proposed method. The FAME components remained the same compared to the sample harvested by centrifugation. Finally, the cost of harvesting and biodiesel production with the proposed method was estimated to be about 44% and 22%, respectively, lower than their counterparts in algal biomass harvested by centrifugation.