Solar Heat Worldwide

This report is split into two parts. The first part (Chapters 3 – 5) gives an over all overview of the global solar thermal market development in 2016. In addition, general trends are described and detailed 2016 data on successful applications, such as solar assisted district heating and solar heat for industrial processes are documented. The concluding chapter of the first part is focused on solar thermal system cost and levelized cost of solar heat for different applications and regions worldwide.

The second part comprising Chapters 6 – 8 presents detailed market figures for the year 2015 from 66 countries around the globe.

Global solar thermal market developments and status in 2016  

The cumulated solar thermal capacity in operation by end of 2016 was 456 GWth (652 million square meters). Compared to the year 2000 the installed capacity grew by a factor of 7.4.

The corresponding annual solar thermal energy yield in 2016 amounted to 375 TWh, which correlates to savings of 40.3 million tons of oil and 130 million tons of CO2.

Despite these achievements, the global solar thermal market has faced challenging times in recent years. Especially in the large markets in China and Europe the traditional mass markets of small-scale solar water heating systems for detached single family houses and apartment buildings are under market pressure from heat pumps and photovoltaic systems.

The most dramatic development was observed in China. For the third year in a row, the 2016 market declined. After –17% in 2014 and also in 2015 the year 2016 continued this trend with –9%.

Positive market developments were seen in small markets in some Latin American countries, India and to a certain extent in Sub-Sahara Africa.

In contrast to the small-scale solar water heating systems, the mega watt-scale solar supported district heating systems and industrial applications have gained increasing interest all over the world in recent years, and several ambitious projects have been successfully implemented.

By the end of 2016, 300 large-scale solar thermal systems >350 kWth (500 m²) connected to district heating networks and 18 systems connected to cooling networks were in operation. The total installed capacity of these systems equaled 1,154 MWth (1,648,383 m²). In 2016, 37 large-scale solar thermal systems with close to 500,000 m² (350 MWth) were installed. About 30% of this new collector area is from the world’s largest plant in Silkeborg, Denmark, which has an installed capacity of 110 MWth (156,694 m² flat plate collectors).

Solar heat for industrial processes is as well a growing market. A number of promising projects have been implemented in the last couple of years ranging from small-scale demonstration plants to very large systems in the several MW range. According to a study published by SOLRICO in early 2017, system designers and collector manufacturers reported more than 500 plants with an overall installed collector area of 416,414 m² for solar process heat worldwide.

The world’s largest solar process heat application in operation was installed in Chile in June 2013. The installation has a thermal peak capacity of 27.5 MWth and covers a total of 39,300 m² of flat plate collector area connected to 4,000 m³ thermal energy storage. The solar thermal system is designed to cover 85% of the process heat demand needed to refine copper at the Gaby copper mine of state-owned mining company Codelco.

Levelized cost of solar thermal generated heat

As noted above, solar thermal markets are facing challenging times partly caused by an increasing economic pressure from other renewable technologies. To address this, a special focus is being given to the economics of solar thermal systems in this year’s report.

The economic analysis based on 2016 cost shows that there is a very broad range in system costs, and subsequently, the levelized cost of solar heat. The cost data shown below refer to end-user (customer) prices excluding VAT and subsidies. These costs are dependent on the system type (thermosyphon or pumped) and the application, such as small domestic hot water systems for single-family homes (DHW-SFH), large domestic hot water systems for multi-family homes (DHW-MFH), small combined hot water and space heating systems (COMBI-SFH) and swimming pool heating systems with unglazed water collectors (POOL HEATING). Further more, the solar fraction and the climatic conditions play an important role.

For domestic applications, the lowest LCOH range is between ~1 E-ct/kWh for pool heating systems (Australia, Brazil), 2 – 4 E-ct/kWh for small thermosiphon domestic hot water systems (Brazil, India, Turkey) and 7 – 8 E-ct/kWh for small pumped domestic hot water systems (Australia, China).

For larger pumped systems in multi-family homes (DHW-MFH) LCOH is lowest in Brazil and India (2 – 3 E-ct/kWh).

Small combined hot water and space heating systems (COMBI-SFH) are cheapest in Brazil (3 E-ct/kWh).

By contrast, the highest LCOH range is between ~2 E-ct/kWh for pool heating systems (Canada, Israel), 7 – 12 E-ct/kWh for small thermosiphon systems (Australia, China, South Africa), 12 – 20 E-ct/kWh for small pumped systems (Australia, Austria, Canada, Denmark, France), 8 – 14 E-ct/kWh for larger pumped systems in multi-family homes (Austria, Canada, Denmark, France) and 11 – 19 E-ct/kWh for small combi-systems (Austria, China, Denmark, Germany, South Africa).

Average LCOH for large-scale systems in Denmark (>10,000 m²) including cost for a diurnal storage goes down to 3.6 E-ct/kWh. For even larger systems (>50,000 m²) with seasonal storage attached a LCOH of 4.9 E-ct/kWh is achieved.

Detailed market analysis for 66 countries based on 2015 data

By the end of 2015, an installed capacity of 435.9 GWth corresponding to a total of 622.7 million square meters of collector area was in operation in the 66 countries analyzed in detail.

The vast majority of the total capacity in operation was installed in China (309.5 GWth) and Europe (49.2 GWth), which together accounted for 82.3% of the total installed capacity. The remaining installed capacity was shared between the United States and Canada (18.4 GWth), Asia excluding China (11.6 GWth), Latin America (11.0 GWth), the MENA countries Israel, Jordan, Lebanon, Morocco, the Palestinian Territories and Tunisia (6.7 GWth), Australia and New Zealand (6.4 GWth), and Sub-Sahara African countries Botswana, Burkina Faso, Ghana, Lesotho, Mauritius, Mozambique, Namibia, Senegal, South Africa and Zimbabwe (1.4 GWth).The market volume of “all other countries” is estimated to amount for 5% of the total installations (21.8 GWth).

With a global share of 71.5%, evacuated tube collectors were the predominant solar thermal collector technology followed by flat plate collectors with 22.0%, unglazed water collectors with 6.2% and glazed and unglazed air collectors with 0.3%.

The top 10 countries – those with the highest market penetration per capita remained unchanged compared to 2014. The leading countries in cumulated glazed and unglazed water collector capacity in operation in 2015 per 1,000 inhabitants were Barbados (489 kWth/1,000 inhabitants), Austria (421 kWth/1,000 inhabitants), Cyprus (400 kWth/1,000 inhabitants), Israel (397 kWth/1,000 inhabitants), Greece (287 kWth/1,000 inhabitants), the Palestinian Territories (276 kWth/1,000 inhabitants), Australia (265 kWth/1,000 inhabitants), China (226 kWth/1,000 inhabitants), Turkey (172 kWth/1,000 inhabitants) and Germany (164 kWth/1,000 inhabitants).

Installed capacity worldwide in 2015

By the end of 2015, a total capacity of 40.2 GWth, corresponding to 57.4 million square meters of solar collectors, was installed worldwide. This means a decrease in new collector installations of 14% compared to the year 2014. This was the second year in a row that a shrinking world market has been observed. Based on data available for 2016 this trend seems to continue.

The main markets in 2015 were again in China (30.5 GWth) and Europe (3.4 GWth), which together accounted for 84% of the overall new collector installations in 2015. The rest of the market was shared between Latin America (1.3 GWth), Asia excluding China (1.3 GWth), the United States and Canada (0.8 GWth), the MENA region (0.4 GWth), Australia (0.4 GWth), and the Sub-Sahara African countries (0.1 GWth). The market volume of “all other countries” is estimated to amount for 5% of the new installations (2.0 GWth).

From the top 10 markets in 2015 positive market development was reported from India (+31.8%), Turkey (+10.0%), Israel (+9.5%), Mexico (+7.8%) and Poland (+6.5%). The other major solar thermal markets within these top 10 countries namely China (–17.0%), Australia (–10.1%), Germany (–9.7%), Brazil (–2.7%) and the United States (–0.7%) suffered market declines.

In terms of economic regions, there was positive market growth in the period 2014/2015 in Asia (excluding China) and Sub-Sahara Africa. In Europe, the market stagnated and in all other economic regions solar thermal system installations dropped.

With a share of 72.3% of the new installed capacity in 2015, evacuated tube collectors are still by far the most important solar thermal collector technology worldwide. In a global context, this breakdown is mainly driven by the dominance of the Chinese market where around 87% of all new installed collectors in 2015 were evacuated tube collectors. Nevertheless it is remarkable that the share of evacuated tube collectors decreased from about 82% in 2011 to 75.1% in 2015, and in the same time frame flat plate collectors increased the share from 14.7% to 20.8%.

In Europe, the situation is almost the opposite compared to China with 72.3% of all solar thermal systems installed in 2015 being flat plate collectors. In the medium term perspective, the share of flat plate collectors decreased in Europe from 81.5% in 2011 to 72.3% in 2015. Driven mainly by the markets in Turkey, Poland, Switzerland and Germany the evacuated tube collectors did increase their share in Europe between 2011 and 2015 from 15.6% to 26.1%.

In terms of new installed solar thermal capacity per 1,000 inhabitants in 2015 the top 10 countries remained the same as in 2014, and Israel kept the leading position. Fast climbers in 2015 were Denmark which overtook China, and the Palestinian Territories (West Bank and Gaza Strip) which now ranks second behind Israel, and Turkey also jumped from seventh in 2014 to fifth place. China slipped from second place in 2014 to fourth.

Distribution of systems by system type and application

The thermal use of the sun’s energy varies greatly from region to region and can be roughly distinguished by the type of solar thermal collector used, the type of system operation (pumped solar thermal systems, thermosiphon systems) and the main type of application (swimming pool heating, domestic hot water preparation, space heating, others such as heating of industrial processes, solar district heating and solar thermal cooling).

Worldwide, more than three quarters of all solar thermal systems installed are thermosiphon systems and the rest are pumped solar heating systems. Similar to the distribution by type of solar thermal collector in total numbers, the Chinese market influenced the overall figures the most. In 2015, 89% of the new installed systems were thermosiphon systems while pumped systems only accounted for 11%.

In general, thermosiphon systems are more common in warm climates, such as in Africa, South America, southern Europe and the MENA region. In these regions thermosiphon systems are more often equipped with flat plate collectors, while in China the typical thermosiphon system for domestic hot water preparation is equipped with evacuated tubes.

The calculated number of water-based solar thermal systems in operation was approximately 108 million by the end of 2015. The break down is 6% used for swimming pool heating, 63% used for domestic hot water preparation in single-family houses and 28% attached to larger domestic hot water systems for multi-family houses, hotels, hospitals, schools, etc. Around 2% of the worldwide installed capacity supplied heat for both domestic hot water and space heating (solar combi-systems). The remaining systems accounted for around 1% and delivered heat to other applications, including district heating networks, industrial processes and thermally driven solar cooling applications.

Compared to the cumulated installed capacity, the share of swimming pool heating was less for new installations (6% of total capacity and 4% of new installed capacity). A similar trend can be seen for several years now for domestic hot water systems in single-family homes: 63% of total capacity in operation and 41% of new installations in 2015 make this kind of system the most common application worldwide, but it is showing a decreasing trend.

By contrast, the share of large-scale domestic hot water applications is increasing (28% of total capacity and 51% of new installed capacity). It can be assumed that this market segment took over some of the market shares from both swimming pool heating and domestic hot water systems in single-family homes.The share of applications, such as solar district heating and solar process heat are increasing the share steadily even if it is still only 3% of the global market.

Employment and turnover

Based on a comprehensive literature survey and data collected from detailed country reports, the number of jobs in the fields of production, installation and maintenance of solar thermal systems is estimated to be 714,000 worldwide in 2015.

The worldwide turnover of the solar thermal industry in 2015 is estimated at E 18 billion (US$ 19.4 billion).

Global solar thermal capacity of unglazed and glazed water collectors in operation grew from 62 GWth (89 million square meters) in 2000 to 456 GWth (652 million square meters) in 2016.The corresponding annual solar thermal energy yields amounted to 51 TWh in 2000 and 375 TWh in 2016.

Environmental effects and contribution to climate goals

The global solar thermal energy yields in 2016 corresponded to savings of 40.3 million tons of oil and 130 million tons of CO2. This shows the significant contribution of this technology to the global climate goals.