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Solar thermal energy on the march

The global market for solar thermal energy has skyrocketed, particularly in China. Despite the boom, what’s considered the most important of all solar technologies still has a long way to reach its true potential.

Mention solar energy and most people are likely to think of sun-powered electrical systems. But there’s a much more important solar technology – solar thermal collectors that can heat water as well as rooms.

“The public awareness of solar thermal energy has absolutely no relation to its energy-saving potential,” said Matthias Fawer, energy analyst at Swiss bank Sarasin, which has researched the solar thermal market.

According to the institute, 68 percent of the solar thermal plants installed worldwide are in China, where the government urged the industry early on to produce collectors. The thinking behind it was purely economical: solar heating is much cheaper than heating with oil or gas – particularly for those with little money.

Depending on the region, solar thermal plants can offset up to 60 percent of the energy required for warm water and heating. The technology is simple: The sun’s rays are absorbed by a flat or pipe-shaped collector which is connected to a warm water vault. A heat transfer fluid such as water or air circulates between the two systems.

As soon as the temperature in the storage vault rises beyond a few degrees, a circulating pump is activated. The sun’s heat is transported to the storage vault and is sent back to the collector where the heat cycle begins anew.

The solar thermal market is booming. In 2008, it jumped by around 40 percent due to high oil prices. And it’s expected to grow by around 15 to 20 percent yearly in the coming years.

In addition to China, other big markets include Germany, Austria, Greece, Turkey, Japan and Israel. In fact, Israel was the first country 30 years ago to make solar thermal plants mandatory for new buildings.

Huge energy-saving capacity

An estimated 60 million households worldwide heat water with the help of the sun. Solar warm water and heating system produce an estimated 174 terawatts of energy yearly. That’s the equivalent of Poland’s electricity needs by 2020. And solar warm water and heating systems produce more energy than geothermal, photovoltaic and solar thermal power plants together.

Together with wind energy, solar thermal energy is considered the main driving force for replacing fossil-based energy with renewable energy.

It’s also hoped to make Europe less reliant on energy imports. A study by Swiss bank Sarasin says that Europe could cut 30 percent of its oil imports from the Middle East if it targeted the use of solar thermal energy. But Europe is still far removed from that target. Sunny countries such as Italy and Spain, which now have laws promoting the use of renewable energy, have long ignored the technology.

Solar thermal energy has now found mention in the EU’s renewable energy directive for the first time and EU member states have to present their plans for the national implementation of the directive by June.

“It’s a unique opportunity to drive forward a technology which lacks a confident industry and a financial instrument such as feed-in tariffs for solar-powered electricity,” said Baerbel Epp from the Global Solar Thermal Energy Council in Brussels.

Epp pointed out that the German model of feed-in tariffs, which allow homeowners to receive money for producing solar electricity, had been adopted around the world. But solar thermal energy still lacked such well-proven subsidies, Epp said.

“The potential to develop further is still huge,” said Fawer. But first the expensive and complex solar thermal systems need a robust consumer base with money to spend, he said.

“That’s why the conditions are particularly good in emerging economies with their new middle class,” he said.

Sarasin reckons that new solar thermal markets are likely to develop in Indonesia, Mexico, South Africa and Brazil. But promising signs are also visible in southern Europe, the US and Australia.

Training staff early on

High hopes are also pinned on India where solar thermal energy has been blocked by long waiting periods for licenses to be awarded and a lack of publicity. That’s despite the technology being promoted by the Indian government and a strong potential market.

Baerbel Epp pointed out that it was important to begin early with providing training to installation and engineering companies.

“Otherwise there’s going to be a lack of know-how in new buildings or those that are upgraded,” she said.

Mexico is considered a place which got all those things right. All the main players were brought together at one table early on and poor sections of the population were given cheap loans to finance the installation of a thermal plant. The results can be seen in the working-class settlement Heroes de Tecamac in Mexico City, where 1,000 households have already installed solar thermal systems.

California too remains a model – the US state has been promoting the construction of solar thermal plants for over eight years with some $380 million (280 million euros). Most of the plants have been built for companies.

That’s part of a global trend, Epp said. “Until now, we’ve only looked at private households. The new focus on big thermal plants in the private sector is very welcome – even for protecting the climate.”