Trends in European Solar Thermal Market

According to the 2003 European Thermal Solar Barometer published last month by EurObserv’ER, in spite of a decline observed in 2002 for the thermal solar market, the sector recorded an annual volume in square meters higher than 1,000,000 square meters for the third consecutive year. Since 2000, the European Union thermal solar market has consistently surpassed the installation milestone of 1,000,000 square meters a year. Even though the year 2002 is still part of this same trend, with 1,191,915 square meters installed, it is nevertheless a reminder of the sector’s relative fragility, as the 2001 market represented 1,565,755 square meters.

Europe, July 11, 2003 [] In terms of operating capacity, the total surface of thermal solar collectors (glazed, flexible and vacuum types) installed in the European Union was estimated at 12,844,900 square meters as of the end of the year 2002. The European thermal solar sector is characterized by the presence of numerous small and medium size companies as well as some very large size firms. Europe has more than a hundred manufacturers, mainly located in Germany, Austria and Greece. Sweden and Belgium have companies that specialize in the manufacturing of absorber material. According to the European Solar Thermal Industry Federation (ESTIF), 16,300 people are working either directly or indirectly in the thermal solar industry. The German market has been able to maintain the highest installation level in the European Union. According to the BSI, an association of German solar industrialists, an additional 574,060 square meters were installed in 2002. Nevertheless, this figure is far below the 925,520 square meters installed during the previous year. In Germany, the number of newly installed systems decreased by more than 42 percent, going from 101,789 installations in 2001 to 58,589 installations in 2002. The drop in the German market can be explained by a decrease in subsidies and the currency changeover to the euro or electoral uncertainties, but the main reason is of structural origin, according to BSI. The German thermal solar market mainly developed on an offer in terms of replacement of old individual boilers (natural gas and heating oil). Due to the flagging German economy, all of the consumer durables market, and so including that of heating apparatus, has collapsed, dragging the thermal solar market along with it. The individual installation market is very sensitive to the economic situation, on the contrary to the collective market, which has very little development in Germany. The Austrian market has resisted the slump better. This success can be partially explained by the Austrian government’s willingness to develop collective installations. The Austrian government has set up a specific incentive system for industry and business that consists of subsidizing 30 percent of total installation cost. Regional programs exist for the domestic sector. The EBHE, the Greek solar industrialists association, estimated the installed surface at 152,000 square meters in 2002 vs. 175,000 meters squared in 2001. This decrease is partially explained by the withdrawal of subsidies. The only incentive that existed for the installation of individual solar systems was removed at the end of the year 2002. It consisted of an income tax deduction equal to 75 percent of total installation cost. France, Italy, Spain, and the Netherlands represented more than three quarters of the European Union market in 2002. This is particularly the case of France, whose thermal solar promotion campaign is beginning to bear fruit. According to Enerplan, a professional solar energy association, the French market for glazed collectors was 55,000 square meters in 2002, equitably divided between metropolitan France and French overseas departments and territories. 7,000 square meters of flexible collectors on the swimming pool heating market segment also have to be added on to this total. In 2002, Italy, Spain and the Netherlands showed installation levels of the same order. The ENEA, an Italian agency for renewable energies, estimated that the thermal solar market represented 57,000 square meters during the year 2002, while the IDEA, a Spanish agency for renewable energies, estimated the Spanish market at 50,250 square meters for the same year. The Dutch market was estimated at 53,000 square meters for 2002. Total thermal solar collector surface installed in the European Union at the end of the year 2002 was estimated at 12,844,900 square meters. This might explain the stagnation in accumulated installed thermal solar capacity for certain countries, even though their markets have been continually growing for several years. The first 2003 market estimations are very reassuring. The German market has clearly picked up this year with an expected growth rate of approximately 20 percent. This optimism is due in part to the German government’s strong willingness to re-launch the thermal solar market. Perspectives of growth are also encouraging in Italy. In September 2002, the Italian Minister of the Environment set up a new subsidy program for the private sector with a cap of 30 percent of installation cost. In France, the Plan Soleil communication actions are going to increase in importance in 2003 with the repeated transmission of TV commercials praising the merits of thermal solar energy. Moreover, it is probable that other European Union markets like those of Spain and the Netherlands will continue to pursue their growth. For the complete report in both French and English, see the EurObserv’ER link below.
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