The Sleeping Giant: Solar Cooling and Heating Market Trends

by Christian Roselund. 2010-09-20

Solar heating and cooling technologies are a simple, carbon-neutral and affordable way to meet the much of the power needs of the world's population. Already these 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 many nations. If the solar heating and cooling industry can successfully convince the public about the benefits of these technologies and manage even a fraction of the policy support that exists for other renewable energy technologies, this industry is poised for even greater growth.

Field of solar collectors with a gross surface area of 1.330 m² on the roof of Festo AG & Co. KG in Esslingen. Courtesy: Paradigma Energie- und Umwelttechnik GmbH & Co. KG.
Field of solar collectors with a gross surface area of 1.330 m² on the roof of Festo AG & Co. KG in Esslingen. Courtesy: Paradigma Energie- und Umwelttechnik GmbH & Co. KG.

Misjudgement of installed solar thermal capacities

 

There are few stories in the development of renewable energy as under-reported as the global rise of solar heating and cooling technologies. In 2008, the total global solar thermal capacity in terms of direct water and space heating and cooling totaled between 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 capacity than wind and PV combined, it is clear that solar thermal technologies are a leading renewable energy technology; however solar heating and cooling 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 the technologies. Solar heating and cooling do not produce electricity. Thus there are no grid hookups, no transmission lines involved, and no need for batteries or other electricity storage options. Its impact can be seen not in electricity generated, but by a reduction in electricity use. In short, its effectiveness is not measured by what is done but by what does not need to be done - namely, using natural gas, electricity, wood and other power sources to heat and cool homes, businesses and public institutions, and heat the water used in these buildings. This reduction in fuel consumed naturally results in reductions in CO2 and other emissions, but also a reduction in the need for new transmission and other features of retail electricity system. Thus solar thermal systems are ideal solutions for distributed energy generation, because the solar heat is used straight were it is needed.

Please note that large plants which use sunlight to heat fluids in order to generate electricity exist and are commonly referred to as concentrated solar power (CSP) or concentrating solar thermal. 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 affluent nations. Germany, Spain, Japan and the United States together accounted for 17.4GW of the world-wide PV capacity of 23GW in 2009. CSP is almost exclusively concentrated in Spain and the United States. Solar heating and cooling technologies, however, have a very different distribution, with the vast majority of units in China, followed by Turkey, Germany and 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 are greatly under-utilized in certain markets, particularly the United States, and hold enormous promise if certain barriers can be overcome. However, whether or not such technologies become popular in the United States, solar heating and cooling will remain a practical and widely used technology in many other nations.

Solar thermal system on a residential building in Germany, courtesy of Wagner & Co., Cölbe, Germany.
Solar thermal system on a residential building in Germany, courtesy of Wagner & Co., Cölbe, Germany.

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 I will discuss in this report work by using the sun's heat to raise the temperature in water, another fluid or air to heat either water or an indoor space, or to run a machine which cools air. This encompasses a wide range of technologies, but some of the basic components remain the same. 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 passes through a heat exchanger to warm either water or air. In the case of solar cooling, the warmed fluid is used in a device called a sorption chiller to cool air.

The types of collectors used vary. For solar water heating applications, which are the vast majority of applications worldwide, collectors may be glazed or unglazed, depending upon their application. 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 of four parts: a clear cover that allows light to penetrate but helps reduce heat losses, a dark absorber material, a series of tubes carrying a fluid (typically either water or propylene glycol), and a backing material 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 a variation on glazed collectors, and represent the majority of collectors in use due to their prevalence in China, the world's dominant market for solar heating and cooling technologies. Evacuated tube systems use rows of glass tubes, each of which contains a heat pipe collector surrounded by a vacuum. This vacuum greatly reduces heat losses, particularly in cold climates.

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

This report focuses on residential and small commercial applications. In Europe, a number of heating and cooling plants 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 the global industry growing an average of 20.1% annually. This growth is slower and less dramatic than other renewable energy technologies such as wind and PV, largely as the industry already had a presence in 2000.

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

Feed-in tariffs in European nations do not apply to solar heating and cooling, and globally these technologies do not have the 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 policy such 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 solar heating and cooling markets like Germany, when federal incentives were cut or abandoned for some time.

 

Geographical distribution of market growth in solar heating and cooling technologies

China not only boasts the world's largest installed capacity of solar heating and cooling systems, but recently has been expanding to take up an even greater share of the market. As of 2008 China possesses 57.6% of the world's recorded solar heating and cooling capacity with 125 million square meters of collector area, and made up 74.6% of the total 2008 solar heating and cooling market with 21.7GWth of 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)
European solar heating and cooling market for glazed collectors, 1999-2009. Courtesy of the European Solar Thermal Industry Federation.
European solar heating and cooling market for glazed collectors, 1999-2009. Courtesy of the European Solar Thermal Industry Federation.

The European market is the most important secondary market at 14.5% of the market for glazed and evacuated tube collectors, with Germany as the largest European national market. However German demand has been volatile, and in 2009 slipped by 23% to 1.61 million square meters of collectors sold, leading to an overall decrease of 10% for the European industry in 2009. Fortunately for European producers, a number of secondary markets are emerging, led by Italy, which installed 400,000 square meters of collectors in 2009 and which 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 tube collectors. It is worth noting that Turkey and Japan both have high capacities of solar collectors installed, but these markets have slumped in recent years. A large number of smaller markets exist in the Middle East, 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 tube technology, evacuated tube collectors comprise the largest number and capacity of collectors sold in the world, with 30 million square meters, or 21.0GWth of the 29.1GWth installed in 2009 (72.2%). Flat-plate glazed collectors comprised another 9.25 million square meters with 22.3% 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 for evacuated 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 the majority of the collectors installed are unglazed collectors for heating swimming pools, however this market is vastly smaller by thermal capacity than Asian or European markets for flat-plate and evacuated tube technologies. In the United States this market has been declining in 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 great potential for solar heating and cooling technologies, yet outside of swimming pool heaters, this market is currently very small. The nation installed a paltry 134MW of flat-plate water collectors and 23.7MW of evacuated tube collectors, plus 1.8MW of glazed air collectors in 2008.

In both water and space heating and cooling the United States represents a huge, untapped market. Many regions of the nation are highly dependent the 84.6 million residential and commercial air conditioning units installed in the United States during the summer months. As a result, demand for power spikes in many states during hot weather, leading to the use of more expensive generation to meet contingency demand, and occasionally even power outages. At a presentation on solar cooling in North America at the 2010 Intersolar North America conference, Thermosol Consulting's Dr. Lucio Mesquita noted that among these 84.6 million units, there were only 20 solar cooling systems.

 

A lack of customer education

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

However, a larger problem is that customers do not buy 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 of customer education about the potential benefits of solar cooling, and during the conference Dr. Mesquita stated that "a coordinated effort is needed to develop the solar thermal market in North America".

 

Policy support

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

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

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

Solar water heating systems in Hawaii, courtesy of metaefficient (http://www.metaefficient.com).
Solar water heating systems in Hawaii, courtesy of metaefficient (http://www.metaefficient.com).

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

Solar cooling system in Sharm El Sheikh, Egypt, courtesy of MED-ENEC (Energy Efficiency in the Construction Sector of the Mediterranean.
Solar cooling system in Sharm El Sheikh, Egypt, courtesy of MED-ENEC (Energy Efficiency in the Construction Sector of the Mediterranean.

Further Information:

·   Solar energy for heating and cooling: the world’s largest solar thermal vacuum tube collector system provides 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