Solar Heating Industry Review 2009

Indeed, the latest ESTIF annual statistics on European solar thermal markets show that while demand for solar thermal technologies increased strongly in Spain, Italy and France, the biggest push came from the German market, which more than doubled from 0.7 GWth to 1.5 GWth of newly installed capacity in 2008.

Demand for solar thermal technology also increased strongly in smaller markets, such as Ireland, Poland and Portugal. Meanwhile, Austria continues to lead the continental states, with a total operational capacity of 273 kWth per 1000 inhabitants. Furthermore, with 29 kWth per 1000 inhabitants, Austria’s newly installed capacity is (in per capita terms) more than high-potential countries such as Spain, Italy or France have installed over the past 20 years. It trails only world champion Cyprus, which reached an installed solar thermal capacity of 623 kWth per 1000 inhabitants at the end of 2008.

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In the face of such impressive growth figures solar thermal is also becoming a significant economic stimulator. The European turnover in solar thermal products surpassed the €3 billion mark in 2008 and the industry now employs more than 40,000 people full-time. ‘Solar thermal is well anchored in today’s European markets,’ says Drücke, adding: ‘With oil prices rising again, we believe that our sector will continue to grow steadily and be less affected by the current economic turmoil.’

Although led by Europe in terms of technology development, in terms of volume, global solar thermal is to a large extent driven by China which is the biggest solar thermal market worldwide. Three out of four collectors are produced and installed in the People’s Republic. Its national market grew by a constant rate of 28% in recent years. The newly installed capacity in 2008 was approximately 21 GWth — 16 times greater than the European market as a whole.

Another promising market outside Europe is the United States. Still small but with a high potential for growth, as the statistics of the Solar Energy Industries Association (SEIA) show in their document: ‘US Solar Industry Year in Review 2008.’ According to this trade group, the US solar thermal market grew by 50% in 2008, reaching some 229,000 m² of collector area, or around 160 MWth.

Economic downturn aside, the prospects for any industry which can report such impressive growth statistics remain positive. Enabling this growth is a global supply chain that is becoming increasingly robust and established as capacity investment ramps up to meet enpanding demand.

The big flat plate collector manufacturers in Europe are well prepared for the boom. These manufacturers have all increased their production capacities considerably over the last year [to July 2009].

Flat-plate Collectors

A significant player in the flat-plate solar thermal supply chain is metals group Luvata, which supplies copper and aluminum tubing as well as producing, for example, a specialized copper strip for solar thermal applications. Formerly known as Outokumpu Copper Products and acquired from Outokumpu OYJ in 2005 by Nordic Capital, Luvata employs over 6300 staff in 19 countries. The company has been busy over recent years building its position in the heating products market with a series of acquisitions.

In April 2007 it gained majority ownership of AST ElectroFin, a US-based provider of corrosion protection and durability solutions for fin and tube heat exchangers and followed this in May that year with the purchase of Italy’s ECO SpA, a large manufacturer of heat-transfer coils and coolers that employs some 2400 people.

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As a result of this deal, the European Commission required Luvata to divest its coil operation in the Czech Republic — Luvata Czech SRO — eventually sold to Lloyd Electric and Engineering Ltd.

In January 2009, Luvata united its heating and cooling operations (ECO, Heatcraft, Coiltech and ElectroFin) under the new ‘Luvata Heat Transfer Solutions’ division.

Aside from acquisitive growth Luvata has also expanded its manufacturing capacity with a US$40 million dollar copper-tube manufacturing plant in Guadalupe, Nuevo Leon, near Monterrey in Mexico. This new facility, which began tube production in September 2008, will increase Luvata’s copper-tube capacity in North America by approximately 50,000 tonnes annually.

Elsewhere in Scandinavia, Sweden’s Sunstrip, now part of S-Solar — formerly known as Earthsun Technology — is another supplier of strips and absorber materials for solar thermal collectors.

Sunstrip has four main products which they say are intended, first and foremost, for the solar collector industry, including strips for solar thermal collectors, absorbers and fullplate absorbers.

Some Austrian Specialists

Among the top three solar thermal manufacturers stands Austria’s GREENoneTEC. It supplies all of its products as customer-specific OEM versions of collectors and mounting systems to key manufacturers of heating systems and providers of solar systems who market solar products under their own name. Serving more than 40 countries worldwide, the company, with 400 or so staff, maintains an export rate exceeding 85% and claims a European market share of over 25%.

Current annual production capacity from its eight lines — six of which use ultrasonic welding and two laser welding — amounts to 1.6 million m¬≤ in a three-shift operation and production volume in 2007 of 730,000 m¬≤ grew to 1,100,000 m¬≤ in 2008. Furthermore, the long-term plans for expansion of the company’s St Veit plant is expected to yield 3 million m¬≤ of collector surface annually. Indeed, January 2009 saw the ceremonial opening of a new glass production plant — Petraglas —  on the St Veit industrial estate, directly adjacent to GREENoneTEC’s premises with an estimated annual production volume of 800,000 m² of toughened glass.

Each year GREENoneTEC says it already uses approximately 3500 tonnes of copper and aluminium for the production of different absorber types.

Another Austrian solar thermal manufacturer is TiSUN, which has been developing, producing and distributing hot water and heating sets, module collectors, large-area collectors of up to 18 m² for a single unit, solar tanks, components and accessories for the last two decades. TiSUN exports approximately 80% of its production and it has some 125 employees at its head office plus a further 90 field staff and sales representatives.

The company is anticipating significant growth in eastern Europe and has recently forged a distribution deal with Ruslan Korytny, which will look after the authorized dealers for the sale of TiSUN products in Russia, Ukraine, Kazakhstan, Uzbekistan, Belarus, Moldavia and Georgia. In 2007 TiSUN’s annual production capacity reached up to 150,000 m² of collector.

Not a manufacturer but an installer that specializes in large-scale commercial or process heat applications, SOLID has since 1992 been planning, building, delivering, assembling and operating large-scale solar plants exceeding 100 m² around the world, providing hot water, heating rooms, and supplying process heat, including district heating. For example, by the end of 2008, the company had installed a collector field of 85 of its sister company Oekotech’s flagship ‘Gluatmugl’ large-scale flat-plate collectors for a leading soft drink company, based in Phoenix, Arizona, in the USA. Each of those panels has an area of 10.5 m¬≤. For more on this project see Solar Sparkle for Arizona from the REW May/June 2009 issue.

From the Heating Sector

While GREENoneTEC, TiSUN, and SOLID are specialist solar thermal businesses, a significant force in the solar thermal market comes from a group of industrial companies which already supply a range of heating, cooling and other domestic energy products, such as condensing boilers, heat pumps and solar PV. Among the largest of these heating technology companies is Viessmann, which weighs in as one of the world’s biggest solar thermal suppliers.

Founded in 1917, the group’s annual turnover is around €1.7 billion and it employs some 8600 staff at its 16 factories in Germany, France, Canada, Poland, Hungary, Austria, Switzerland and China. Exports account for 60% of the turnover.

The company offers an extensive range of systems for solar energy including both flat-plate and vacuum tube solar collectors, although the vacuum tube component of the business is believed to be comparatively small at around 10%. The company also supplies dual-mode hot water cylinders, combi and buffer cylinders and solar control units. Its largest copper solar collector is the new Vitosol 200-F, with up to 9.43 m² of absorber area. In its 2008 full year results, published in March 2009, Viessmann noted that, by product area, the company saw the greatest increase in turnover in renewable heating systems, at 48%. The German heating market in particular saw positive developments for the company in 2008, where Viessmann’s sales of solar thermal systems came in at an estimated 500,000 m² of collector area. (See caption and credit information for image at the bottom of this article by clicking on the image in the image gallery.)

Nonetheless for 2009, the company foresees at best, slow growth in Germany and falls in international markets — although longer-term it believes there is a positive future for the industry. ‘Existing buildings still offer great potential for modernization, which must be exploited if the policy objectives are to be reached by 2020. To achieve this, all existing systems would have to be brought up to date over the next 12 years. In Germany alone just 20% of 17 million heating systems meet this requirement. This means that 13.6 million systems need to be renewed by 2020, which equates to 1.1 million systems per year. This requires the current market volume of around 600,000 heat sources to be virtually doubled,’ the company said in a statement.

Germany’s Bosch Thermotechnik is another heating technology conglomerate that wields considerable might in the solar thermal market. As a result of the worldwide slump in business activity, the Bosch Group had to record a fall in sales and earnings in fiscal 2008 and at €45.1 billion, sales were down 2.6% year-on-year. However, the heating technology business, by contrast, felt the positive effect of improved incentive schemes for modern heating systems in a number of European countries. The group reported strong growth in 2008 in spite of the looming economic crisis. Sales revenue rose by 7% to around €3 billion. Renewables accounted for 12% of the total 2007 sales and this share is projected to increase to 30% by 2015.

The German federal government’s market incentive programme led to record sales, especially in the solar thermal sector, the company says. Outside Germany, Bosch Thermotechnology grew by 5%, with growth slowing down in the second half due to the significantly worsening economic environment.

Nonetheless, in 2008, Bosch Thermotechnology also expanded its global production capacity for solar collectors from 250,000 to 350,000 units annually, equivalent to some 800,000 m² of collector surface area. With a €5 million investment in a new Bosch Solarthermie GmbH production hall in Wettringen, Germany, allowing a 50,000 unit per year expansion. With operations starting in 2009, 200,000 collectors per year can now be produced at the site.

In addition to the new production hall, a new administrative building is scheduled for completion at the site during 2009. Bosch Thermotechnology also produces solar thermal systems at its plant in Aveiro, Portugal, which opened in 2007 and has an annual production capacity of up to 150,000 collectors. The flat-plate collectors are marketed under international and regional brands such as Buderus and Junkers.

Schüco International KG from Germany is a leading European building envelope specialist which develops and markets complete aluminium and steel systems. Experience in aluminium fabrication and building integration has been used to construct solar collectors made from an aluminium frame and rear panel. The company has an annual production capacity of some 400,000 solar collectors, equivalent to something over 1,000,000 m². With approximately 5500 employees in more than 75 countries worldwide, Schüco offers a choice between its Premium and Compact line ranges of solar products; for example, Schüco Premium collectors have gross surface area of 2.69 m² and a rated thermal output of 2 kW.

Reporting its 2008 figures of a €2.2 billion turnover, an increase of over 20% compared to the previous year, Schüco’s solar business division was able to turn over €690 million and therefore accounted for more than 30% of the total revenue for the first time, making it one of the largest German solar companies. These figures compare well with 2007, when the solar thermal business turnover actually fell by 10%.

More Specialists

Wagner & Co is another of the leading solar power companies located in Germany.

A manufacturer of solar power systems from units for single-family houses, up to large systems, solar roofs, and solar facades, in summer 2008 the company expanded solar collector production capacity at its Kirchhain site, near its headquarters in Hessen. The new manufacturing capacity, of up to 200,000 units per year across five parallel production lines, is equivalent to a total collector area of some 460.000 m¬≤ and the company adds that the building and production capacities can be extended further. The new solar factory houses the final finishing of the company’s EURO-collector family, including the 2.4 m¬≤ effective aperture EURO-C20-AR.

Elsewhere in Germany, in 1993 KBB Kollektorbau began industrial production of laser-welded solar absorbers. In the initial two years of production, the largely automated production line produced over 300,000 m² of copper and aluminium absorbers. Due to sharp increases in copper prices, in 2005 KBB started production of laser-welded aluminium absorbers which had a clear cost advantage in 2006 over copper equivalents. In 2006, some 350,000 m² of total absorber area was produced and the company relocated within Weide to a larger site on the banks of the Spree River.

As with GREENoneTEC, the company delivers exclusively to its OEM partners which sell its technology under their own name. As a consequence, KBB is not represented with its own brand.

Outside Europe

A number of other major players in the solar thermal market are based beyond continental Europe, among them Turkey’s Ezinc. One of the major manufacturers of solar thermal components, Ezinc have been operating since 1983 and it has production facilities located in Kayseri, in central Turkey. In 2007 the company installed a full-plate ultrasonic welded absorber production line with a capacity of 75,000 absorbers per year. The company adds that its solar collector production capacity has reached 400,000 m² and its products are exported to 55 countries.

Other major manufacturers based outside Europe are Rheem, and Solahart, a subsidiary of Rheem, of Australia, Genersys plc and Solar Twin Ltd of the UK, Spain’s Acciona Energy and Ibersolar Energía, S.A, Enerworks from Canada and Soletrol, based in Brazil, as well as Israeli firm Nimrod, which has production facilities in Rishon Le-Zion and Bat Yam. Meanwhile, China’s Innosolar Energy Co. Ltd specializes in the production and manufacture of flat-plate collectors with an annual manufacturing capacity of 120,000 m².

Vacuum Tube Collectors

It has been estimated that there are some 5000 manufacturers of vacuum tube collectors worldwide, a sector which is dominated by Chinese companies.

Himin Solar Energy Group, established in 1995 in Dezhou City, Shandong Province in eastern China is the world’s largest manufacturer of solar thermal products, producing some 1 million sets and installing more than 2 million m² of absorber area annually. Along with vacuum tubes, Himin offers solar water heaters, solar panels, solar lights, coated steel tubes for power generation, and solar air-conditioners, among other products. In 2006 the group reported revenue of yuan 2 billion ($294 million as REW goes to press). The company reportedly occupies 6% of the market, although China accounts for around 80% of the world market.

In a major development, the company’s China Solar Valley project, in Dezhou, a prefecture-level city in northwestern Shandong province, will see a site of more than 330 hectares become home to five centres, namely, manufacture and logistics, R&D and testing, scientific popularization and education, international conference and communication, and tourism. It will gradually develop into the world’s largest solar industrial base, Himin says.

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Huang Ming, chairman of Himin Group, said the decision was part of the company’s strategy to transform Solar Valley from an R&D center into an area of eco-friendly residential buildings covering a wide range of solar technologies. Dezhou is to be host to the 2010 International Solar City Congress.

In May 2008, the company’s first overseas branches were established in Vietnam and Pakistan and it followed this in December that year with news of a $100 million investment under the terms of a strategic co-operation deal with investment groups Goldman Sachs and CDH. Although Himin has declined to disclose the size of the stake in the company that the $100 million secured, it has been estimated at around 15%.

The deal was initially announced in early 2008, but had been delayed due to the financial crisis, said Huang Ming, adding that the cash injection will be used for its further development plans, including setting up marketing and logistics centers in Xi’an, Wuhan and Hangzhou, and going publicly listed. The company is seeking to expand its market by 50%–100% in 2009.

Another Chinese company, Haining Baoguang Heat Collection Tubes Co., Ltd, specializes in manufacturing solar vacuum collector tubes and has more than 30 automatic production lines for vacuum sputtering plating. Baoguang has the capacity to produce more than 10,000,000 tubes annually, they say, and has become the biggest manufacturer for solar vacuum tubes in the south of China.

Under the terms of a co-operation deal with Linuo group, Baoguang has secured the 72,000 tonne annual requirement for raw borosilicate glass 3.3 for its three-cavity vacuum tubes.

Beijing Tsinghua Solar Systems Ltd. is another world-renowned vacuum-tube company. Located in Haidian New Technology Development Zone in Beijing, China, the company is backed by joint share holders, Tsinghua Holding Co., Ltd of Tsinghua University and two major state-owed companies: Beijing First Light Industry Holding Co., Ltd and Beijing Capital Steel Stock Co., Ltd. The company’s main solar products are all-glass evacuated tubes, solar water heaters, collectors, and large-scale solar hot water systems. The company is also exploring solar desalination. One of the largest producers of all-glass evacuated tubular collectors and solar water systems in the world, annual production capacity has reached 7 million vacuum tubes, and 300,000 water heaters and collectors with a staff of 1200.

In a further example, Beijing Sunda Solar Energy Technology Co., Ltd. is another Chinese manufacturer of evacuated tube solar collectors. Jointly founded by Daimler-Benz Aerospace (DASA) and SUNPU in 1995, Sunda has been active in the European market for over 12 years and established a subsidiary in Germany in 1997, which followed the 1996 opening of a manufacturing plant located in Sunhe, Hebei Province, near Beijing which has a production facility of more than 500,000 tubes per year. More than 60% of the company’s products are sold overseas.Currently, Sunda is offering its SEIDO tubes in four different models.

A Sino-European group comes from a joint venture between Linuo Group and Paradigma, established in April 2001 as Shandong Linuo Paradigma Co., Ltd.

With an area of 50,000 m² Linuo Paradigma claims to own the largest solar water heater workshop in Asia and it has a production capacity of 1 million solar water heaters and 2 million m² of solar hot water systems annually. It has also built automatic production lines with Germany.

Financed and supported by the German government, the ENISO testing centre was established through close co-operation between Shandong Linuo Paradigma Co., Ltd and the Institute for Thermodynamics and Thermal Engineering (ITW) in the University of Stuttgart in 2003. It is the only testing centre established according to European solar industry standards, the company says.

Linuo Group owns a complete production chain for solar energy products from mineral exploration, through borosilicate glass production to glass vacuum tube, and solar water heating systems. Germany’s Paradigma is a well known company focused on large-scale solar cooling and heating projects. The company claims to hold a market share of its evacuated tube solar collectors of more than 50% in Germany, and 25% across the whole of Europe.

Meanwhile, in March 2008, Linuo Paradigma signed a contract with RC groups of Cuba to transfer a production line for thermo-siphon solar water heaters to produce 5000 sets this year. Production capacity is expected to reach 50,000 sets in 2010.

There are a number of other European vacuum tube manufacturers, for instance fluorescent tube specialist Narva Lichtquellen, which began its own manufacture in 2006.

Alongside major solar players such as GREENoneTEC and Viessmann Werke, the largest assemblers in Europe are Germany’s Ritter Solar and Kingspan Thermomax of the UK.

Located at Dettenhausen, Germany, near Tübingen, since its foundation in 2000, Ritter Solar has established itself as the largest German manufacturer of evacuated tube collectors. In fully automated production facilities with a manufacturing area of more than 9000 m² in Baden-Württemberg the company assembles panels using complete vacuum-tubes from Linuo. It aims to more than double current annual production capacity to reach 200,000 m² of collector area.

British manufacturer Kingspan Thermomax operates two sites for collector manufacture, with the tubes produced in Bangor, Northern Ireland, and the collectors assembled at Wrexham, in Wales.

Kingspan Renewables was established in late summer 2007, when buildings materials group Kingspan Group Plc acquired the Thermomax brand of solar vacuum-tubes and flat-plate systems. The company followed with the opening of its first sales and technical support facility outside the UK & Ireland in Lecco, near Milan in Italy and in May 2009 the company opened a new US office.

‘Italy is a key market for Kingspan Renewables,’ said business development director Mark Brookes, adding: ‘This is the start of our European business, we have ambitious plans for expansion into Europe and ... Italy is the perfect place to start.’

The company’s largest solar thermal installation to-date is at Leicester College at one of its campus sites, Freeman’s Park in Leicester, England, This development uses 300 vacuum-tubes across a 36 m² flat roof.

Energy in Transformation

As the shift towards a low-carbon energy sector steadily gathers momentum, it appears that a transformation of the energy market is inevitable. Growing concerns over security of energy supplies, price volatility in fossil-fuel markets, and the threat of climate change are accelerating this transformative process. It seems that, despite years of neglecting the solar thermal sector, policy-makers are finally getting the message that solar thermal has a great deal to offer in respect of all of these issues.

Indeed, as a highly efficient renewable energy source for heating and cooling — an area that corresponds to more than 45% of the global need for energy — among the renewable energy sources available, solar thermal energy has perhaps the greatest potential of all to transform the global energy market.

Certainly as a market, the solar thermal sector is displaying admirable growth, particularly so in the face of the on-going economic downturn, matched with a 60% market increase in Europe in 2008 for example. Recognizing this groundswell, many of the leading manufacturers are already ramping up production capacity and looking to expand into previously untapped regional markets in anticipation of further growth.

Those in the market for a solar thermal installation apparently benefit from a broad range of technologies, manufacturers and installers, indicating that the roots of a competitive market likely to engender further product innovation are already well established. With the giants of the industry standing at the ready, eager to deliver, perhaps it is at last time for the sleeping giant of renewables to wake up the world.

David Appleyard is associate editor of Renewable Energy World magazine.

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Sidebar: Long-term Drivers of the Global Solar Thermal Market 

Some good ideas take a while to be copied. This is the case with solar building codes, which were invented in Israel 29 years ago. It was back in 1980 when the Israeli government implemented a law which made solar water heaters mandatory in new buildings up to 27 metres high such as residential housing, hotels, guest houses and care homes.

It turned out to be a success. Nowadays, more than 80% of the households in Israel obtain their domestic hot water from solar rooftop heaters.

This success is about to be copied by many more countries in the world — among them important solar thermal markets such as China, Germany, Spain, Australia and India. Within the last two to three years, this political instrument has reached all five continents. It will become — where correctly implemented — an important long-term driver of the global solar thermal market.

But there is a second factor that is pushing the international solar thermal markets in a sustainable direction. It is the urgency of saving electricity in many countries. Politicians have understood that solar thermal technology can play a crucial role in reducing national peak loads and avoiding electricity gaps on the national level. The Australian government is leading the way by prohibiting electric water heaters initially in new construction buildings, and most probably refurbished buildings will also follow. This opens the door for the greenhouse gas emission free production of hot water and space heating by the sun.

Bärbel Epp is from solrico – Solar Market Research & International Communication, based in Bielefeld, Germany.