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Solar thermal boom in Europe, USA and ChinaJanuary 2008

The boom in the European renewables market in 2006 was attributable to the rise in fossil fuel prices, changes in building regulations and subsidies, and increased environmental awareness among end users. Consequently, renewable and low energy technologies are no longer considered a niche market and are becoming mainstream products, supplied by almost all boiler manufacturers.

Unlike electrical heat pumps and solar photovoltaic, solar thermal systems are seen as an affordable system for water heating that has been established in several countries. In 2006 the European market was estimated at 3.7 million square metres of glazed collectors. However, sales vary from one country to another. Sales in the UK represented only 22% of the sales in France, and a mere 3% of the sales in Germany.

Despite double-digit growth in almost all of Western Europe with the exception of the Netherlands, the solar industry remains dependent on national and regional subsidies and tax rebates in most countries.

The market is largely oriented towards combi-applications for sanitary hot water and space heating in Germany, Austria and other northern European countries. However, this is not the case in southern Europe, China, India and the US, where systems are used to supply sanitary hot water.

In Germany and France, an increasing number of manufacturers have started selling solar systems that can be installed with heat pumps. Solar systems are installed with pellet boilers as a complete renewable energy package in some niche markets, in particular Austria, Germany and France, depending on the incentives offered to manufacturers. 

In terms of supply, China is home to a large number of solar collector manufacturers for both evacuated glass and flat plate collectors. Although China continues to be the world largest market with double digit growth, about a dozen Chinese companies are focused on exports, increasingly targeting growth markets in Europe and the Americas.

In Europe boiler manufacturers, especially those from Germany have started to offer a complete range of high efficiency water heating systems and compete with established solar collector manufacturers in worldwide markets. For example, Bosch Thermotechnik, Viessmann and MTS have either invested in expanding the existing manufacturing plants or set up new ones.

Other renewable technologies for water heating:
Apart from solar water heating, heat pumps, particularly dedicated hot water integrated air-to-water type, are becoming another cheaper alternative. They are used mainly in apartments with lower heating requirements, and areas where there is a lack of ground space for drilling. Another split type of air to water heat pumps are combi-systems that can provide space heating and sanitary hot water with cooling capabilities in the summer.

Low energy technologies such as gas engine heat pumps (GEHP) are mostly sold in the commercial market in Japan, South Korea, China and increasing sales in a limited number of European countries such as Italy, Netherlands, Spain, and UK.

Small cogeneration or micro-CHP (combined heat and power) systems are predicted to emerge as an energy efficient technology in the next five years as boiler manufacturers are developing these products as an innovative solution where a boiler generates electricity in the process of heating water. Currently these products have been available only in Japan where by the gas utilities have been distributing these systems successfully, while in Europe a few hundred units have been in field trials in the Netherlands, Germany and the UK.

As for fuel cell based micro-CHP systems, several Japanese and European manufacturers have been developing these systems with around 2,000 systems in field trials in Japan and few hundreds in Europe, mostly in Germany. However, the high costs to develop such energy efficient equipment is a major barrier hampering commercial launch.

Statistical data in this article is quoted from the World Market for Solar Thermal 2007 study which includes market forecasts to 2010. Separate reports are available for Austria, France, Germany, Switzerland, UK and 13 other countries. For more information on this report please contact Jon Williams at WMI.