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Is the future still bright for the solar thermal market?June 2010

Following the publication of the BSRIA World Solar Thermal Study 2010 for which BSRIA undertook research in 18 countries. It is reported five markets declined in 2009, adversely affected by the negative performance of the global economy: Germany, France, Spain, Italy and USA had declines varying between -8% and -27% with Germany having the highest decline; the US market showed of a decline of -8%. The remaining 13 countries researched showed positive growth rates that vary between +5% and +54%. The biggest market China continued to show strong growth reaching an estimated sales figure of 32.2 million square metres in 2009.

 In all countries researched the most popular collectors are of the flat plate type. The only exception being China, where vacuum tubes are by far the most common type of collector found on the market.

Combi applications for sanitary hot water and space heating are popular systems in Germany, Austria and other northern European countries. However, this is not the case in southern Europe, China and the US where systems are mostly used to supply sanitary hot water.

Thermosiphon systems are mainly to be found in southern European markets, Portugal, Spain, parts of Italy. Forced circulation systems are most common in all the other countries.

Increases in raw material prices have put pressure on manufacturers, but increased competition in many countries is working in the opposite direction in terms of end user price levels. Distribution patterns vary from country to country, but in general installers play an important role together with wholesalers in more developed markets.

 


 

 

 

 

 

 

The Asia Pacific has the largest Solar Thermal Market Share in 2009 at 67% (mainly due to China), which is an increase of 23.6% from the previous year. Europe has less than a quarter of that share with the American region having the smallest share.

Asia Pacific 
 


 

 

 

 

 


China by far has the largest market share in the Asia Pacific and despite the recession it has seen substantial growth between 2008 and 2009 of 24%. India and South Korea are the next largest countries in terms of market share.

China

The market has been booming for the past decade, thanks to fuel price rise and to the increasing attention placed by the Chinese government upon clean and renewable energy and on the increasing awareness of energy conservation. In the five-year plan released in 2006, the Chinese government set a target to reduce energy consumption per unit of GDP by 20%, and to reduce discharge of major pollutants by 10% in five years. The Chinese government supports the development of alternative, new, clean energy in order to cope with energy challenges. Also local governments are now being called to introduce policies, standards and incentive schemes within this sector. Solar energy was selected as the most important residential alternative energy solution due to the constant technology research by local solar thermal manufacturers of vacuum tube solar thermal products.
Improved quality and technology of vacuum tubes is also helping Chinese manufacturers. However, limitation of applications in high-rise buildings has declined solar thermal water heaters within first tier cities. Vacuum tube systems dominate the market and also have a higher growth rate compared to flat plate systems.

Furthermore the solar thermal market in China is forecast to be very promising, averaging a 20% growth in the next two years, increasing solar thermal water heaters penetration in China rural areas. For example, in Jiangsu province, the solar thermal penetration is above 60%. The market is forecast to reach 55 million square meters in 2012, which will be more than double the size of 2007. The major share of products will still be vacuum tubes, but thermosiphon shares will decrease since solar thermal water heating will also enter further the urban market in China.

China has the largest production capacity for solar water heating systems in the world. There are about 10 leading companies such as Himin, Sunrain, Lino Paradigma that also export their products to many countries, including Europe, Mid-Asia, and Southeast Asia.

India

India has also witnessed a good growth of 23% one reason for this could be because India is emerging as another low cost manufacturing base for solar thermal, alongside China. The market for flat plate collectors in 2009 was dominated by local manufacturing. Vacuum tubes on the other hand are imported from China. Market growth is expected to continue at high rates of atleast 20% over the next few years.

Europe

 

 

 

 

 

 

Germany

In Europe, Germany still has the largest Solar Thermal Market Share; despite the fact that recently it has decreased significantly.

After the collapse in 2007, solar thermal systems defended their position as one of the fastest growing heating technologies in Germany by growing at more than 120% in volume in 2008, despite the global financial and economic turmoils towards the end of the year. However 2009 saw this growth slow down but its forecast to pick up once again from 2010 onwards.

Spain and Italy are the second largest solar thermal markets in Europe; however both these countries experienced a considerable drop in market size from the previous years.

Spain

2008 was a good year for the Spanish solar thermal market; an important driver that allowed sales to boost was the legislative measure introduced by the Spanish government requiring solar thermal systems to be installed in new buildings.

The Spanish solar thermal market for 2009 was not as optimistic, it reached a volume of 298,000 m², experiencing a decrease of about 24% compared to the previous year. Flat Plate collectors dropped by 24% whereas vacuum tubes' decrease rate was of about 15% compared to 2008. This was driven by a severe decline in the residential new build, a sector badly hit by the global economic crisis, and by the delicate economic situation that the country is experiencing.

Italy

The market size in 2009 saw a drop of 1.7% from the previous year and was in the region of 405,000 m², mainly driven by the negative performance of the construction sector and the general economic crises that has weakened consumer's willingness to invest in renewables or make non essential investments. End users who were considering an investment in solar thermal technology have postponed their decisions until the global economic situation improves.

Over 59,000 residential systems are estimated to have been installed in 2009. This estimation is based on the assumption that an average residential system is made up of 4.5 to 5.5 m². The total market value at manufacturer's selling prices was of about 82 million Euros in 2009.

Americas

USA is the second largest market after Brazil in the Americas; it has a global market share at 1.6% in 2009 down by 2% from 2008. This is closely followed by Mexico that has a combined market share of 1.3%.
 


 

 

 

 

 

USA

In 2009, the solar thermal market had a significantly lower growth compared to the evolution of sales seen over the previous years. Due to the financial crisis, and the subsequent collapse in the housing market and the economy, the solar thermal market has declined by 8% during 2009, in spite of the important backing given by the government for renewables.

However some recovery is expected for 2010, as the US economy improves, and consistent high growth rates are expected for the next few years (from 2011 onwards).

The glazed solar thermal water heaters account for around 10% of the total US solar thermal market. Low temperature unglazed collectors for swimming pool water heating account for about 88% of the market.

Mexico

The Mexican solar thermal market is growing at a strong rate. Traditionally it was a flat plate collector market, but for the last few years there has been a substantial increase in the number of small companies directly importing vacuum tubes systems from China. These thermosiphon systems are sometimes sold for less than US$ 400 and usually consist of a 2 square metre collector combined with a smaller than average water tank (90 - 130 litres). Moreover volume wise flat plate and vacuum tubes have a similar market share; value wise flat plate collectors have a larger share.

BSRIA's study provides a powerful and unbiased assessment tool of the future potential for major renewable heating technologies in Europe, North America and the Asia Pacific region. The research is done presented individual country sections on all major markets, including product segmentation, an application, distribution, and analysis of market drivers and barriers in each country as well as forecasts with scenarios and forecast assumptions.

Note to editors:
BSRIA's world renewables study was published in March 2010 (10 core countries) with a further 8 (non-core countries) releasing in July. They cover a total of 18 countries for electric Heat Pumps and 18 markets for Solar Thermal. Each report contains information on market size and segmentation, market trends, a strategic analysis, sales by application and distribution channel. Also, there is an overview report available which comes in an excel format which provides a useful tool to filter and sort data according to their needs and interests.

The reports are largely based on in-depth interviews with key manufacturers, distributors, utilities, and other influencers in the market.

For further information on content and analysis, please contact Tim Page at BSRIA (tim.page@bsria.co.uk)

 

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