In 2008, the European solar thermal market put on a strong spurt only to mark time in 2009 with about 4.2 million square metres installed, which is 443 708 square metres less year-on-year. The economic crisis has had a ripple effect on the European market in the shape of the Euro crisis at the beginning of May, so the slump seems set to continue on into 2010.
The solar thermal collector surface area currently in service in the uropean Union is of the magnitude of 32.6 million square metres, equivalent to a capacity of 22.8 GWth. The largest national collector bases are to be found in Germany, Austria and Greece. Cyprus keeps the lead in the per capita surface area indicator with 873.9 square metres for 1000 inhabitants, ahead of Austria (517.1 square metres per 1000 inhabitants) and Greece (360.5 square metres per 1000 inhabitants).
In 2009, European market was dominated by flat glazed collector technology, accounting for 86.6%, against 9.8% for vacuum tube collectors and 3.6% for unglazed collectors.
While total collector surface area is down by 9.6% on the 2008 installation figure, when almost 4.61 million square metres was installed, not all the Union’s countries have been affected in the same way. While major European markets such as Germany, France, Greece and Spain have witnessed a tail-off in installations, others such as Poland, the UK and Portugal have picked up, or have stabilized – in the case of Austria.
The experts have put forward other reasons for the contraction of the solar thermal market besides the credit crunch that have persuaded many individuals to postpone their investment decisions. The German and French automobile industry recovery plans in particular have cornered part of householders’ financing capacities. Fratricidal competition from the photovoltaic sector, which saw installations rise sharply in 2009 (see the April 2010 photovoltaic barometer), may also be having its toll on the solar thermal market.
Bundestag freezes aid
The Zentrum für Sonnenenergie und Wasserstoff-Forschung (ZSW), which gathers renewable energy statistics on Germany, states that the total surface area for solar thermal collectors installed in Germany during 2009 rose to 1,619,800 square metres. Thus, the solar thermal market contracted by 9.2% in 2009 having almost doubled between 2007 and 2008 (from 960,000 to 1,920,000 square metres).
Property crisis drags Spanish market down
According to the Spanish solar thermal industry association (ASIT), the solar thermal surface area installed in Spain in 2009 was 402,000 square metres which is 64,000 square metres less than in 2008 (-13.7%). Of this total, 332,000 square metres was installed to comply with the Building Technical Code (CTE – Código Técnico de la Edificación), that obliges all new construction or redevelopment projects to cover 30-70% of their domestic hot water needs using a solar thermal system. The rest was installed as part of the autonomous communities aid programme (55,000 square metres), for industrial (5,000 square metres) and other applications (10,000 square metres).
Part of the explanation for the contraction of the Spanish market is the country’s devastating property slump that has brought countless construction and redevelopment projects to a halt. The crisis has limited the effectiveness of the new building code as in 2009, only 240,000 new build or redevelopment projects fell under its scope and that number is likely to drop to 190,000 projects in 2010. ASIT reckons that if the trend is left unchecked by the implementation of new mechanisms, the market will shrink by over 20% in 2010 down to 320,000 square metres leaving the country a long way short of its 5 million square metres 2005-2010 Renewable Energies Plan target.
Poland takes shine to solar thermal
Poland is one of the few European countries whose market has maintained its positive growth trend (up 11.3% between 2008 and 2009). According to IEO EC BREC (the Polish Institute for Renewable Energy), the installed surface area rose to 144,308 square metres in 2009 as against 129,632 square metres in 2008. A major part of the Polish market is taken up by collective installations (38,890 square metres in 2008 and 43,292 square metres in 2009). The sector’s actors have developed a project for the sector for the 2020 dateline prompted by the publication in June, of the National Action Plan for Renewables, which has been drawn up as part of the European Directive.
Market downturn means job losses
The solar thermal sector is one of the renewable sectors that creates the highest numbers of jobs and wealth, partly because the vast majority of the system components sold in Europe are produced on European soil, and partly because the sale, installation fitting and maintenance are labour-intensive. However growth of the various European markets governs the number of (full time equivalent) jobs and added-value that can be generated by the sector. According to the BSW (German solar energy industry association), the contraction of the German market has led to the loss of 5,000 jobs, bringing the sector job total down to 20,000. At the same time the sector’s registered sales tumbled from 1.7 to 1.2 billion euros. The Spanish sector has also been affected by the turndown in its domestic market. ASIT put the number of jobs in the sector down by 25%, from 10,000.
No clear recovery before 2011
The European solar thermal market’s return to growth initially expected for 2010 is likely to be feeble. After the financial and economic slump, most European Union member countries have had to deal with the Euro crisis at the start of this year. This new upset is likely to be painful and the austerity measures taken by Greece and Spain are not conducive to the fast turnaround of their solar thermal markets. Generally speaking, current political wisdom in many of the Member States seems to be pointing to tighter control of public spending, which limits the room for help with investment. Germany’s decision to block part of the budget allocated to aids with investing in renewable energy-fuelled heating appliances is unlikely to support the German market’s recovery in 2010.
However some markets should weather the crisis better than others. The Polish and UK markets in particular, should continue to grow. The Italian and Austrian markets should at least hold their own in 2010. As for the French market, it should continue to benefit from the growth of the collective housing segment. The recovery of the private housing market is still unsettled despite a highly attractive incentive scheme, but the market’s return to growth will call for a significant reduction in system prices.
At the end of the day, the EU’s 2010 figure for installed collectors will largely depend on the German market’s capacity to operate without its main aid system, as Germany accounted for 40.4% of the European market in 2009.
These various elements indicate that there will be no growth in the solar thermal market before 2011. It would seem likely that 2010 will suffer a further turndown. According to EurObserv’ER, this drop should be around 10%, putting the 2010 market at around 3.7 million square metres. If delisting is taken into account, the European Union collector base should finally be a little less than 36 million square metres.
However for all that, the sector’s future is not under a cloud. The June publication of the national renewable energy plans of action that have to be submitted by all countries to the European Commission should confirm the various Member States’ intentions about boosting the development of their renewable energy sectors. ESTIF published a study of the European Union’s solar thermal potential in 2009, with this in mind.
Taking a hypothesis of a 9% drop in total energy demand due to energy efficiency measures by 2020 (in comparison with 2006), solar thermal’s contribution to the EU 20% renewable energies goal would be 6.3% with the full R&D and Policy (RDP) scenario comprising political and financial support mechanisms, energy efficiency measures and research activities. This contribution would only be 2.4% with the less ambitious Advanced Market Deployment (AMD) scenario comprising political and financial support mechanisms, modest energy efficiency measures and enhanced research activities.
The total area of solar collectors required would be 145.5 million square metres (101.9 GWth) in the case of the RDP scenario and 388 million square metres (271.6 GWth) the case of the AMD scenario. A BAU scenario (Business As Usual) said to be “development at the current rate” would lead to collector surface area of 97 million square metres by the same dateline (67.9 GWth). While these results appear to be ambitious, they are in keeping with the commitments made by the Member States. The roadmaps to be presented as part of the national action plans will give a clearer vision of the sector’s development
For additional information: