Solar Cooling and Heating Market Trends

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Solar heating andcooling technologies are a simple, carbon-neutral and affordable way tomeet the much of the power needs of the world’s population. Alreadythese technologies are expanding rapidly, without the policy support of"sexier" PV and wind technology. However, there are significant barriers to be overcome, one of which is a lack of public understanding in manynations. If the solar heating and cooling industry can successfullyconvince the public about the benefits of these technologies and manageeven a fraction of the policy support that exists for other renewableenergy technologies, this industry is poised for even greater growth.

Misjudgement of installed solar thermal capacities

There are few stories in the development ofrenewable energy as under-reported as the global rise of solar heatingand cooling technologies. In 2008, the total global solar thermalcapacity in terms of direct water and space heating and cooling totaledbetween 145 and 152GWth (gigawatts-thermal). By comparison, total installed solar photovoltaic (PV) capacity was roughly 16GWel, and total wind capacity was estimated at 121GWel. At roughly ten times the raw capacity of PV and at a greater capacitythan wind and PV combined, it is clear that solar thermal technologiesare a leading renewable energy technology; however solar heating andcooling has not received the gushing press that has accompanied the rise of PV and wind industries.

Comparative global capacity in operation and energy generated of different renewable technologies, courtesy of IEA SHC.
Comparative global capacity in operation and energy generated of different renewable technologies, courtesy of IEA SHC.

Distributed energy generation

One reason for this may be the nature of thetechnologies. Solar heating and cooling do not produce electricity. Thus there are no grid hookups, no transmission lines involved, and no needfor batteries or other electricity storage options. Its impact can beseen not in electricity generated, but by a reduction in electricityuse. In short, its effectiveness is not measured by what is done but bywhat does not need to be done – namely, using natural gas, electricity,wood and other power sources to heat and cool homes, businesses andpublic institutions, and heat the water used in these buildings. Thisreduction in fuel consumed naturally results in reductions in CO2 andother emissions, but also a reduction in the need for new transmissionand other features of retail electricity system. Thus solar thermalsystems are ideal solutions for distributed energy generation, becausethe solar heat is used straight were it is needed.

Please note that large plants which use sunlight toheat fluids in order to generate electricity exist and are commonlyreferred to as concentrated solar power (CSP) or concentrating solarthermal. These plants are not covered in this report, as this technology was covered in a previous report by Solar Server, available here: http://www.solarserver.com/solar-magazine/solar-report/solar-report/concentrated-solar-power.html

The global distribution of solar heating and cooling is also far different than PV, CSP and concentrating photovoltaics(CPV), which are concentrated in the most developed and affluentnations. Germany, Spain, Japan and the United States together accountedfor 17.4GW of the world-wide PV capacity of 23GW in 2009. CSP is almostexclusively concentrated in Spain and the United States. Solar heatingand cooling technologies, however, have a very different distribution,with the vast majority of units in China, followed by Turkey, Germanyand Japan, and the highest concentration of these technologies in Cyrpus and Israel.

This Solar Report covers the current state of global solar heating and cooling technologies, some promising technologies and views of potential markets. Solar heating and cooling technologies aregreatly under-utilized in certain markets, particularly the UnitedStates, and hold enormous promise if certain barriers can be overcome.However, whether or not such technologies become popular in the UnitedStates, solar heating and cooling will remain a practical and widelyused technology in many other nations.

Solar thermal technology overview

Technologies for solar heating and cooling have been covered in previous reports by Solar Server, therefore this report will provide only a brief overview. The solar heating and cooling systems Iwill discuss in this report work by using the sun’s heat to raise thetemperature in water, another fluid or air to heat either water or anindoor space, or to run a machine which cools air. This encompasses awide range of technologies, but some of the basic components remain thesame. A collector uses the sun’s heat to warm the fluid or air, which is then piped to where it is needed, and in many cases the fluid passesthrough a heat exchanger to warm either water or air. In the case ofsolar cooling, the warmed fluid is used in a device called a sorptionchiller to cool air.

The types of collectors used vary. For solar waterheating applications, which are the vast majority of applicationsworldwide, collectors may be glazed or unglazed, depending upon theirapplication. Unglazed collectors are inexpensive to manufacture but have high heat losses, and are typically used for heating swimming pools and other low-temperature applications. Glazed collectors are composed offour parts: a clear cover that allows light to penetrate but helpsreduce heat losses, a dark absorber material, a series of tubes carrying a fluid (typically either water or propylene glycol), and a backingmaterial that also prevents heat losses.

Cut-away image of flat-plate collector, courtesy of Igneus Ltd. (Enniscorthy, Ireland)
Cut-away image of flat-plate collector, courtesy of Igneus Ltd. (Enniscorthy, Ireland)
Diagram of an evacuated tube collector, courtesy of Skyreach Solar - Scanpower Ltd., Dannevirke, New Zealand.)
Diagram of an evacuated tube collector, courtesy of Skyreach Solar – Scanpower Ltd., Dannevirke, New Zealand.)

Evacuated tube collectors can be seen as avariation on glazed collectors, and represent the majority of collectors in use due to their prevalence in China, the world’s dominant marketfor solar heating and cooling technologies. Evacuated tube systems userows of glass tubes, each of which contains a heat pipe collectorsurrounded by a vacuum. This vacuum greatly reduces heat losses,particularly in cold climates.

The type of collector used varies widely bynational market. In China and Jordan evacuated tube collectors represent the majority of collectors sold. Glazed flat plate collectors areprevalent in most other nations. In the United States and Australia pool heating is the most common application of these technologies, andunglazed flat-plate collectors dominate.

This report focuses on residential and smallcommercial applications. In Europe, a number of heating and coolingplants have been built at a larger scale (above 350KWth), with a total capacity of 160MWth, however these will not be the focus of this report.

Solar heating and cooling market growth by approx 20% per year

Total global installed capacity of solar heating and cooling systems have increased four-fold from 2000 to 2008, with theglobal industry growing an average of 20.1% annually. This growth isslower and less dramatic than other renewable energy technologies suchas wind and PV, largely as the industry already had a presence in 2000.

Amid this trend of growth have been significantfluctuations from year to year. The global solar heating and coolingmarket grew 34.9% during 2008, after relatively flat growth during 2007. While the global industry had strong expectations for 2009, in Europethe solar heating and cooling industry contracted 10%.

Feed-in tariffs in European nations do not apply tosolar heating and cooling, and globally these technologies do not havethe policy support that PV and other renewable energy technologies do.This means that a stable market is not guaranteed by strong policies,but also that these markets are not subject to wild swings in policysuch as in the changes in the Spanish PV feed-in tariff in 2008. Nonetheless swings or stop-and-go policies affected some of the important solarheating and cooling markets like Germany, when federal incentives werecut or abandoned for some time.

Geographical distribution of market growth in solar heating and cooling technologies

China not only boasts the world’s largest installedcapacity of solar heating and cooling systems, but recently has beenexpanding to take up an even greater share of the market. As of 2008China possesses 57.6% of the world’s recorded solar heating and coolingcapacity with 125 million square meters of collector area, and made up74.6% of the total 2008 solar heating and cooling market with 21.7GWthof new installations.

2008 market share of glazed flat-plate and evacuated tube collectors by region and nation. Courtesy of IEA SHC)
2008 market share of glazed flat-plate and evacuated tube collectors by region and nation. Courtesy of IEA SHC)

The European market is the most importantsecondary market at 14.5% of the market for glazed and evacuated tubecollectors, with Germany as the largest European national market.However German demand has been volatile, and in 2009 slipped by 23% to1.61 million square meters of collectors sold, leading to an overalldecrease of 10% for the European industry in 2009. Fortunately forEuropean producers, a number of secondary markets are emerging, led byItaly, which installed 400,000 square meters of collectors in 2009 andwhich is showing much more stable market growth.

Outside of China and Europe, the remainder of the world market in 2008 made up only 6.1% of glazed and evacuated tubecollectors. It is worth noting that Turkey and Japan both have highcapacities of solar collectors installed, but these markets have slumped in recent years. A large number of smaller markets exist in the MiddleEast, South and Central America and the Caribbean.

Distribution by technology of market growth in solar heating and cooling technologies

Driven by a Chinese preference for evacuated tubetechnology, evacuated tube collectors comprise the largest number andcapacity of collectors sold in the world, with 30 million square meters, or 21.0GWth of the 29.1GWth installed in 2009 (72.2%). Flat-plateglazed collectors comprised another 9.25 million square meters with22.3% of the global market by thermal capacity, as in most other nations flat-plate collectors are the dominant type. In Germany, Italy, Poland, the United States, the United Kingdom and Spain the market share forevacuated tube collectors increased from 2006-2008.

Manufacturing of flat-plate collectors, courtesy of GREENoneTEC.
Manufacturing of flat-plate collectors, courtesy of GREENoneTEC.

Worldwide, flat-plate collectors gained a slightly greater market share in 2008.

In the United States, Canada and Australia themajority of the collectors installed are unglazed collectors for heating swimming pools, however this market is vastly smaller by thermalcapacity than Asian or European markets for flat-plate and evacuatedtube technologies. In the United States this market has been decliningin recent years following the collapse of the home building industry.

The special case of the United States: a market waiting to happen

The United States in particular holds greatpotential for solar heating and cooling technologies, yet outside ofswimming pool heaters, this market is currently very small. The nationinstalled a paltry 134MW of flat-plate water collectors and 23.7MW ofevacuated tube collectors, plus 1.8MW of glazed air collectors in 2008.

In both water and space heating and cooling theUnited States represents a huge, untapped market. Many regions of thenation are highly dependent the 84.6 million residential and commercialair conditioning units installed in the United States during the summermonths. As a result, demand for power spikes in many states during hotweather, leading to the use of more expensive generation to meetcontingency demand, and occasionally even power outages. At apresentation on solar cooling in North America at the 2010 IntersolarNorth America conference, Thermosol Consulting’s Dr. Lucio Mesquitanoted that among these 84.6 million units, there were only 20 solarcooling systems.

A lack of customer education

Dr. Mesquita identified a number of barriers to theadoption of solar heating and cooling technologies. Due to large-scale,cheap, heavily subsidized coal and natural gas generation, the UnitedStates has particularly low retail electricity rates, which averagedUSD$0.12/KWH in May 2010. These systems also require high initialinvestments.

However, a larger problem is that customers do notbuy a product if they do not know it exists or how it can benefit them.Among the strongest barriers identified by Dr. Mesquita is a lack ofcustomer education about the potential benefits of solar cooling, andduring the conference Dr. Mesquita stated that "a coordinated effort isneeded to develop the solar thermal market in North America".

Policy support

Along with their lower profile, solar heating andcooling technologies have not received the same level of policy supportas other renewable energy technologies, such as PV. The most effectiveand widespread policy in the world for developing PV and other renewable energy capacity is the feed-in tariff. However feed-in tariffs do notapply to technologies like water heating that do not produce electricity for the grid, meaning that solar heating and cooling technologies arenot supported by this most important policy tool.

The United States has a wide range of policies toencourage renewable energy development, many implemented at the statelevel. While 44 states have incentives for solar water heating, solarwater heating is only considered an eligible technology in 11 of the 31states to pass a Renewable Portfolio Standard (RPS), and in only sixstates does it count towards technology minimums for solar technologies.

A notable exception to US policies is the US stateof Hawaii, a state which is highly dependent upon imported fuel forelectricity generation. Hawaii has mandated that as of January 1, 2010,new construction must feature solar water heating.

India may be the nation that has made thestrongest policy commitment to solar heating and cooling technologies.As part of the Jawaharlal Nehru National Solar Mission, the IndianGovernment has set a goal to install 15 million square meters of solarthermal collectors by 2017 and 20 million square meters of solar thermal collectors by 2022. China and the United States were the only nationsto have a capacity greater than 20 million square meters in 2008, and if India can reach these goals it will mean substantial progress for thenation.

Further Information:

·   Solar energy for heating andcooling: the world’s largest solar thermal vacuum tube collector systemprovides power for the largest adsorption cooling system worldwide[link: http://www.solarserver.com/solarmagazin/anlage_0308_e.html

·  Solar-assisted heating and cooling of buildings:
technology, markets and perspectives http://www.solarserver.com/solarmagazin/solar-report_0210_e.html

First Image: Field of solar collectors with a gross surface area of 1.330 m² on the roofof Festo AG & Co. KG in Esslingen. Courtesy: Paradigma Energie- undUmwelttechnik GmbH & Co. KG.

Original Article on Solarserver





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