Support and Demand Opening Up European Heating Market

Greater emphasis on energy savings in the heating segment, together with new legislation mandating the use of renewable energy for heating, has increased the market penetration of renewable heating technologies such as biomass boilers and solar thermal systems in Europe, a new report says.

However, heavy reliance on government support in most regions and the low acceptance of renewable heating technologies will be the main challenges faced by the industry in future, the analysis from Frost & Sullivan says.

According to the study, the European heating market across commercial, residential, public and industrial segments was worth US$7.14 billion in 2008 and this is forecast to reach $13.15 billion in 2015.

Concluding that there are many European Union (EU) wide as well local legislations aimed at increasing the share of renewable heating technologies, the study: ‘The European Heating Market: Emerging Opportunities for Renewable Heating Technology’, notes that the EU Energy Performance of Buildings Directive has had a significant impact. It has resulted in local legislation in countries such as France and Germany supporting the use of renewable heating through subsidies and other incentives, Frost says, adding that the short-term implication on this market will be an increased number of incentives for the use of renewable heating over the next three years in the EU nations.

Frost argues this will be a stepping-stone for manufacturers to shift production from non-renewable technologies to renewable ones such as biomass boilers, while in the long term, the directive will lay the foundation for self-sustained growth in several new markets. However, the study also warns that in regions without clear incentives for the adoption of renewable heating, the change in attitude among consumers towards the technology will be slow, concluding that consumers should be convinced about the benefits and given clear financial incentives to facilitate greater adoption until the market reaches a critical mass and can achieve self-sustained growth.

“The European heating market has been driven by a gradual drift towards more efficient and renewable heating technologies,” explains Frost & Sullivan research analyst Akhil Sivanandan, adding: “The introduction of a new Europe-wide and national legislation which provides added incentives to consumers to adopt such technologies ensures that the market is set to continue on a steady growth trajectory.” Nonetheless, he says: “End-users and tertiary market participants such as installers and developers are still apprehensive about the new renewable heating technology. In the newer markets, there is still a perception that the technology is unproven and that the cost-savings and advantages are inflated.” However, he concludes,: “Manufacturers and concerned entities have had moderate success in their attempts to raise awareness through local advertising campaigns.”

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