In this paper, the water-based Ag nanofluids are synthesized by the chemical reduction method and their extinction coefficients are measured by an in-house developed measurement device. The Ag nanofluids are manufactured by the chemical reduction method with the mixing of silver nitrate ($AgNO_3$) and sodium borohydride ($NaBH_4$) in an aqueous solution of polyvinyl pyrrolidone (PVP). The extinction coefficients of Ag nanofluids are measured by means of the in-house developed apparatus at a wavelength of 632.8nm according to the particle volume fractions. The results show that the extinction coefficient of water-based Ag nanofluids increases with the increase of nanoparticle concentrations. Finally, the temperature field and efficiency of direct absorption solar collector (DASC) are analytically estimated based on the measured extinction coefficient of water-based Ag nanofluids. The results indicate that the direct absorption solar collectors using nanofluids have the feasibility to improve the efficiency of conventional flat-plate solar collectors without using an absorber plate.