At the moment, heating and cooling makes up 49% of Europe's energy demand – most of which is at temperatures of up to 250°C. Comparatively, electricity makes up 20% and transport 31%.

According to the European Solar Thermal Technology Platform (ESTTP), part of the European Technology Platform on Renewable Heating & Cooling (RHC-ETP), today's solar thermal technologies are more or less able to cover most of Europe's heat and cooling demand – in principle.

By 2030, ESTTP says solar thermal can cover 50% of total heat demand combined with energy efficiency measures. However, to reach this goal, new applications need to be developed and deployed. The main applications would be the active solar building (where all heating and cooling demand is met by solar), solar renovation, industrial applications up to 250°C, and solar district heating and cooling.

District heating

Around 1% of the European solar thermal market is made up of district heating systems. Most of the plants cover the heat load in the summer using diurnal water storage, although some are equipped with seasonal storage covering a larger part of the load. Over 80% of these installations have flat-plate collectors.

Denmark, often hailed as a pioneer in the use of renewables, saw an 8000 m² installation completed in 1995 on the island of Marstal. Combined with a 2100 m³ water storage tank, it was built to cover up to 15% of the small island's annual heating load. The plant has since been extended to 18,300 m² (12.8 MW_th) with 14,000 m³ of storage.

Xavier Noyon, the new Secretary General of the European Solar Thermal Industry Federation (ESTIF), tells Renewable Energy Focus: “The solutions are there – it is not a massive technological gap between solar systems for single families and for district heating. It is more a market question than a technology question because there is very little to develop in terms of technology. It is much more the market that has to develop further.”

Gerhard Stryi-Hipp, President of RHC-ETP and part of ESTTP, says solar thermal district heating is still relatively expensive compared to heating from oil and gas, and therefore this market segment will not grow as fast as other potential solar thermal applications. “But district heating and utility scale district heating is a very promising future application.”

Process heat

One area where both ESTTP and ESTIF predict that solar thermal has great potential, is for industrial process heat in applications up to 250°C. However, this is still very much in its infancy. In 2008, less than 100 operating solar thermal systems for process were in used with a total capacity of around 24 MW_th.

Industries that could make use of solar thermal for their process heat demand include food; wine and beverages; transport equipment; machinery; textiles; and the pulp and paper sector.

One obstacle, however, is the prohibitive upfront cost, with many investors looking for short return-on-investment times – something solar thermal cannot yet meet. This combined with a less impressive track record and industry's often discounted contracts for oil or gas supplies, add to the barriers that need to be overcome before industry can adopt solar thermal.

Domestic hot water and heating

Stryi-Hipp says: “Space heating is very popular in Germany, Austria and Switzerland, and also partly in France. In Germany and Austria, the share of the market for space heating or combined systems is about 50% or more. In other regions of Europe – in Southern Europe – like Spain, Italy, or Greece, domestic hot water systems are prominent and space heating is less popular.

“With domestic hot water systems, you can cover about 60-70% of the energy demand for domestic hot water annually. For space heating or combined systems which support space heating in an efficient building, you can cover 20-30% of the overall heat demand with a solar thermal system,” he adds.

Noyon adds that in addition to pure solar thermal systems of hot water and/or heating, another trend is to combine solar thermal with current or renovated heating systems – so combining solar thermal with for example a fossil fuel-based boiler.

These systems could run entirely on solar when weather conditions allow it. “In nearly all climates in Europe – perhaps except the really northern parts – there is always somewhere you could completely switch off your heating system when the [solar thermal] system meets all hot water and heating demand. So you can optimise the use of the other [fossil fuel] source,” Noyon tells Renewable Energy Focus.

Combination systems could also use other forms of renewable energy instead of fossil fuel, for example heat pumps, biomass, and condensation heaters. “Solar thermal has a competitive advantage because it can be combined with any other source, and if you only buy the solar thermal part, the investment is not so big.”

Noyon predicts that in the future, large buildings – for example, large hotel complexes or resorts – could use solar thermal to cool the air, heat the swimming pool, and provide space heating when needed.

Cooling and air-conditioning

According to ESTTP figures, around 250 solar air-conditioning systems were installed in Europe by 2007. Solar cooling is divided in two main types: open cooling cycles and closed cycle machines. In open cycles, a sorptive component is in direct contact with environmental air, and is able to dehumidify the air. Closed cycle machines have a refrigerant undergoing a closed thermodynamic process.

According to ESTTP, heat driven cooling is still new and “relatively unexplored technology.” It therefore has scope to reduce costs and increase performance. Solar cooling also faces many of the same obstacles as solar heating: high investment cost, the question of building integration, lack of design guidelines and tools, and awareness.

Stryi-Hipp says: “We're only in the starting phase of the first pilot and demonstration phase in Europe. … We have to reduce the size of the absorption and adsorption chillers, make it more compact and reduce the investment cost.”

ESTIF's Noyon says solar cooling is becoming more and more popular. “Solar cooling is extremely interesting because one of the main problems of solar thermal is that you get less production possibility at the time of the year you would need it most. Let's say in the average European climate, you wouldn't be able to cover your heat demand with solar at the time of the year you need it most [in winter], and when you need it less in the summer, that's when your production capacity is at its peak.”

Solar cooling would allow the exploitation of the summer sun's energy capacity. As with district heating, the technology is there, “but the market is developing slowly,” Noyon says. That said, ESTIF member ClimateWell AB of Sweden, have been reported as saying they sell a solar cooling system a day.

Storage

But what if you want heating and/or cooling when the sun is not shining? Storage for one to two weeks is already widely used, but seasonal storage – i.e. storing heat from the summer sun to use in winter – is still in its infancy.

In order for solar thermal to meet all of space heating and hot water demands in domestic housing, storage development is crucial, according to ESTTP. The most common storage medium is water; but it has low heat capacity, and therefore requires large space.

Stryi-Hipp says the key to storage is to increase the heat density. “You need seasonal storage where you are storing the heat from summertime into wintertime. This is possible today with water storage, but water storage has a high volume – typically you have a volume of more than about 10 m³ for a solar fraction of perhaps 70%. The goal is to reduce the size of the storage by storing the same amount of heat energy.”

One technology could be phase-change materials (PCM), which can be used to store energy at lower temperature levels. The second technology is chemical storage where it is possible to store a higher amount of energy at the same volume. “There will be several R&D projects in the coming years to elaborate possibilities to improve the heat density in that storage,” Stryi-Hipp says.

Storage also enables the use of solar thermal in regions such as Northern Europe, which has less sunshine in winter. “Already in the 1990s, we saw installations in Sweden of very large solar district heating systems where large solar thermal collector fields harvest or produce heat. This heat is stored in very large seasonal storage in the ground,” Stryi-Hipp explains.

One solar heating and cooling company that is looking into the storage question, is Austrian Solar Installation and Design (SOLID). CEO Dr Christian Holter tells Renewable Energy Focus: “There are concepts that use different combinations of salt and water. … The really highly-concentrated and really low concentrated solutions have different energy content.

“It might turn out that for different applications you need to use different concepts. Latent heat is really efficient in a small band of temperature change, and the situation of the other concept is you can have long-term storage without much loss. But they are two different concepts that might end up in different applications,” he adds.

Further research

ESTTP says research challenges to reach the stage where solar thermal can meet 50% of total heat demand in Europe in 2030, include long-term efficient storage. Other developments needed are new materials for solar systems, improvements in solar cooling, and high temperature solar collectors. “Today, perhaps 0.1-0.2% of the overall heat demand is covered by solar thermal, so we have a lot to do to increase it to 50%,” Stryi-Hipp says.

Solar collectors can still see significant improvements – especially in terms of cost reductions and designs. But ESTTP says low temperature collectors used on buildings are already “very efficient.”

Stryi-Hipp does not believe major improvements in efficiency on the collector side will be possible, but that research is needed on how to integrate solar thermal better into the building envelope. Alternative concepts for collectors such as air collectors, solar thermal photovoltaics (PvT), and collectors for higher temperatures will also be needed.

SOLID's Holter says: “There's definitely still potential on the collector side.” Although, he adds: “However, the more critical point is to prove the system concept, because on the panel you may be looking at a 1-3% gain in efficiency, but if you have some system achievements that do not turn out properly, you can easily lose 20% of the gain.”

Policy

So what policies and incentives affect, and drive, solar heating and cooling?

ESTIF's Noyon says the European energy efficiency policy, which is important for the building sector in general, will be important for solar thermal heating and cooling as well. But he points out that only having energy efficiency policies for new build is not doing enough to meet the EU's 2020 targets. “What about the rest of the building stock?” Noyon asks.

Stryi-Hipp says: “We need political support to raise awareness with the customers and the people who could invest in solar thermal systems. We need incentives and some support programmes in order to make it attractive … On the other side, we need more R&D activity in order to develop the technologies further to be able to enter [more] market segments.”

Last year, the EU announced the Renewable Energy Directive, and for the first time, renewable heating and cooling was mentioned in a directive, something Stryi-Hipp calls “a great success for the heating and cooling sector.”

At the moment, there are mainly two ways in which solar thermal heating and cooling is supported in Europe, and that is through incentives or tax reductions, which is used in Germany and France respectively; or having laws and obligations to use solar thermal in new buildings or renovations, which is the case in Spain and partially in Germany.

“The incentives policy differs a lot from country to country in Europe, but most of the countries do have incentive programmes or obligations – which is a good basis [for solar thermal]. But what we also see is it needs continuation, continuous support, and awareness programmes. … We also need installers – they have to be trained,” Stryi-Hipp says.

“The second point is that on the European level – and more and more on national levels – there is an increase in building standards and increased requirements regarding building standards. What we expect over the coming years is that investors in the building sector will have to use solar thermal energy in order to fulfil those requirements,” he adds.

The market

With some incentives already in place, where is the solar heating and cooling market at today?

Germany was the biggest solar thermal market in 2008 with 1.5 GW_th (2.1 mil m² of collector area), according to ESTIF. Spain was second with 988 MW_th (1.4 million m²), followed by Italy: 295 MW_th (421,000 m²), France: 272 MW_th (388,000 m²), and Austria: 243 MW_th (ca. 350,000 m²).

In September 2009 ESTIF said solar thermal could make up 6.3% of the EU's 20% renewable energy target, representing an annual sector growth rate of 26%. And by 2050, solar thermal has the potential to cover 47% of the EU low-temperature heat demand.

According to ESTTP, a global market size of 160 GW_th (250 million m²) per year can be predicted by 2020, based on an annual growth rate of 20%.

ESTIF's Noyon says that in the first 11 months of 2009, 3.9 million m² of solar collectors were sold in Europe – of which approximately 80% were flat plate collectors and 20% vacuum collectors.

The recession – a geographical shift

2009 was a very hard year to assess due to the recession. However, ESTIF's Noyon says: “Investment in solar thermal has not been completely stopped following the problems of 2009 and the recession. The production capacity in Europe is still growing, but the trend we see is that investment has been relayed also a lot to outside of Europe. Some of the manufacturers in the European market are now trying to compensate for the fact that the European market is perhaps not growing as fast as they would have expected.”

Outside of Europe, investment has mainly been in America and India. “The Chinese market is a bit different because there are mainly Chinese manufacturers – they have a much larger solar thermal industry, but it's much harder to penetrate there,” Noyon adds.

Markets particularly hard hit by the recession include Germany, Austria, Spain, France and Italy. “Germany suffered a lot – an estimated 30% decrease. Markets like Spain, France and Italy have also suffered – and suffered at a time when they were really taking off, starting to grow really fast.”

Hit by building sector collapse

Spain's solar thermal market was hit hard despite a solar obligation that all new buildings must include renewables – and this is because of the near collapse in the new building market that came with the recession. Noyon says: “Our growth is very much linked to the growth of the building sector.”

Countries like Poland, Hungary and Slovakia are still growing, however. “Probably because they have not been subject to the trend like [we've seen] in countries like France and Spain, where it's very much linked to the building sector,” Noyon says. “Also, the market level is low – they're going from such a low figure.”

Investors

According to Noyon, investment in solar thermal has come mainly from companies who are not only solar thermal manufacturers alone, but large classical heating companies such as Bosch.

Utilities, on the other hand, have not shown much interest in solar heating and cooling. “Solar thermal is not really on top of their agenda,” Noyon says. This is partially due to strong feed-in tariffs for solar photovoltaics (PV). “In some countries, for example France, where electricity cost is so low, a lot of people will have heating systems powered by electricity. So in the short term, they would have a much better return on investment by installing PV on the roof, and selling the electricity for a subsidised price,” he says.

Noyon envisages a future cooperation with utilities, however, where customers would be offered a new type of contract where the utility would finance the initial investment cost and the customers paying back through the energy savings they make by not using conventional sources of power.

Cost and payback times

One question often asked by investors, is ‘what will it cost, and when will we get a return on our investment?’ Stryi-Hipp says these factors depend on policy decisions and energy prices going forward.

The cost for solar thermal is usually concentrated at the installation phase with low maintenance costs from there on. It is possible to simply divide the total sum on the amount expected to be produced by the system over its lifetime and compare that with energy prices. “But since we don't know how the oil and gas prices will develop, we can only make assumptions,” Stryi-Hipp says. However, solar thermal has the advantage that the cost stays the same over the lifetime of the system.

“If you assume an oil price and gas price having a continuous increase over the next 20 years of for example, 5% annually – we've seen much more over the last 10 years, but if you calculate with 5% – then solar thermal systems are already cost competitive,” Stryi-Hipp says.

According to Holter at SOLID, solar thermal is already a competitive technology if done right. But as Stryi-Hipp points out – it depends on assumptions about future energy prices.

“Some say: ‘I expect fossil fuels to stay at the same price level for the next 20 years’ – and that's a really tough sell. But some say: ‘I expect oil to increase by almost 10-20% every year’ – then the deal is almost done,” Holter says. “The problem, I would say, is the high initial cost, because you have to ask people to put energy costs for the next 5-12 years on the table in one go. This is definitely a hurdle.”

According to ESTTP estimations, solar domestic hot water is often already cost-competitive with fossil-fuel based solutions over the lifetime of the solar thermal system – if positive boundary conditions are in place. The Technology Platform believes that by 2030, solar thermal costs could come down by 60% through technological progress and economies of scale.

Over the last 10 years, for every 50% increase in the total installed capacity of solar water heaters, an approximate 20% reduction has been observed in investment costs (in Europe), ESTTP says. This does depend, however, on geographical location and local policies.