Opt for solar thermal water heating

The space and water heating industry (for residential and commercial buildings) accounts for around 7% of annual global carbon dioxide emissions, producing approximately 2.5 Gt of CO2 emissions per year (1). Water heating is estimated to represent 15% of total energy demand for the building heating. Most of the water heating is done based on natural gas or electricity, yet the solar thermal water heating also plays a modest role, with a cumulative market capacity that reached 480 GW in 2018. It is expected to grow at an increasing rate to around 800 GW thermal by 2026 (CAGR 5.3% vs. CAGR 3.3% for 2015-2018), with China and Europe among the key adopters (2).

Solar thermal systems are typically used as a complement to more conventional systems, and their application (active or passive) enables building owners to save 10 to 50% of their annual water heating bill (3). Installing solar thermal can reduce the indirect use phase carbon dioxide emissions in water heating up by up to 95% per kWh (dependent on the available grid electricity mix in the country of use).

Solar water heating systems use solar energy to heat water for storage and usage. Market solutions typically use panels or tubes (solar collectors) to gather solar energy – converting the infra-red portion of visible light to heat. Depending on the type and region, a solar water heating system can be filled with water or another anti-freezing liquid (e.g. a mixture of water and glycol).

For companies or private individuals trying to decarbonize, the potential of solar heating varies with climate conditions. In Spain, for example, it can reach 1670 kWh/kWp, whereas in the Netherlands, it may remain around 1050 kWh/kWp (4).

Solar thermal water heating technology has been adopted across all geographies – with regional variances to reflect local climate conditions, e.g. the installation of solar thermal panels and water storage systems on the roofs of buildings in warmer climates.

Solar thermal water heating systems can enable emission savings of more than 95% CO2 per kWh savings. System efficiency can differ significantly based on location and time of year. For example, solar thermal water heating system will reach around 100 MWh/year efficiency in the United Kingdom and around 200 MWh/year efficiency across most of Saudi Arabia (for 100 kWp of installed capacity in medium size commercial applications) (5).

In 2018, the largest solar thermal markets were China (total capacity of 337,617 MW), Turkey (17,596 MW) and Germany (13,512 MW). Countries with higher growth rates were Denmark (170%), Cyprus (24%) and South Africa (20%) (6). System maintenance requirements and cost are low, however, boiler compatibility and overall installation costs must be considered.

For industrial processes, solar thermal water heating can be used for providing low temperature heating systems up to 150°C. Currently, solar thermal systems are also used in breweries, mining, agriculture (crop dying) and the textile sector. Of 155 solar heat systems for industrial processes, 56 are in Europe (2015) (7).

Global heat consumption from renewables accounted for only 10% in 2019, falling short of climate targets. Whereas further growth is anticipated, estimates show that the penetration of solar thermal technologies will likely fall 30% short of required deployment targets by 2030, at 280 million dwellings (compared to 400 million required under of the IEA’s Net Zero Emissions scenario by 2050) (8).

The following implementation options are typically considered by companies aiming to adopt solar thermal water heating systems:

• Direct single party investment

• Enter multiple party consortium investment

Image: Penetration of solar thermal technologies under current trends with respect to IEA NZE deployment target to 2030

Source: IEA and SHC TCP estimates; IEA Net Zero Emission by 2050 report.

Climate impact

Targeted emissions sources

Solar thermal water heating systems are used for building water heating purposes, especially in warmer geographies. Technology targets carbon dioxide emissions in Scope 1 and 2 intensity reduction.

Additionally, a switch to solar thermal (active or passive) impacts Scope 3 emission in:

• Category 1 (Purchased goods and services)

• Category 10 (Processing of sold products)

• Category 11 (Use of sold products)

• Category 12 (End-of-life treatment of sold products)

Decarbonization impact

Emissions are primarily associated with the production phase, whereas usage phase CO2 emissions are low. Manufacturing emissions are estimated to be 14gCO2e/kWh. Initial investment in solar thermal water heating systems increases carbon dioxide emissions due to the sourcing and manufacturing of additional installation components for the building’s infrastructure.

During the use phase, emissions are negligible, at 4.2 gCO2e/kWh, compared to a gas boiler at 220-350 gCO2e/kWh. System maintenance needs are minimal. Compared to other solutions for water heating, CO2 emissions can be lowered by more than 95% per kWh.

End-of-life treatments emissions are estimated to be up to 4 gCO2e/kWh. This is low compared to other electricity generation sources, as materials retain their value, and can be recycled when the product reaches end of life.

Business impact

Benefits

Clean or low-emission water heating, low operating and maintenance costs, tax breaks and subsidies, depending on the country of application, ease of installation on rooftops and on the ground, high recyclability potential.

Costs

• Impact on operating costs

Operating costs for solar thermal water heating is minimal (compared to gas or electric water heating systems). Based on the type of installation, it can require a system check-up every few years and a potential anti-freeze fluid change after a set period of use. System usage can lower annual water heating costs by roughly 10-50% (multiple variables apply). Typically, solar thermal water heating systems are combined with natural gas or electric heating sources. Savings cost calculations should be conducted on a case-by-case basis.

• Investment required

Capital investment in solar thermal water heating is substantial and depends on technologies, locations and labor costs. Nevertheless, the long product lifetime and lower water heating costs ensure return on investment.

• Eventual subsidies

Regional and country-specific subsidies may apply based on location of use

Indicative abatement cost

Abatement cost for solar thermal water heating (dependent on technology currently in use):

• -100-50 $US/tCO2e (2020)

Impact beyond climate and business

Co-benefits

No operating noise, water heating efficiency increases in peak day hours and warmer seasons, local financial installation incentives.

Potential side-effects

Water heating intermittency depending on local and current weather conditions, may be unsightly, potential end-of-life waste pollution, water is heated to lower temperatures.

Typical business profile

Individual households and businesses in most industries interested in solar thermal water heating system integration withing buildings and lowering long-term water heating cost. Solar water heating systems could be leveraged for small- and medium-sized business for the production (or pre-heating) of water used in low temperature industrial processes (below 150°C) – lowering costs of manufacturing or operations (7).

Approach

Solar thermal water heating installation should be geographically considered with respect to available sunshine and system efficiency in the country of use. Local government requirements, subsidies and tax breaks should be considered.

The solution can serve as a stand-alone system for water heating in hard-to-reach locations.

Stakeholders involved

• Company functions: Procurement, operations

• Main providers: Biggest manufacturers by collector area produced in 2015 - Greenonetec, Fivestar, Soletrol, Bosch, Sunrain, Chromagen, Arcon-Sunmark, Viessmann

• Other: local solar hot water installation maintenance services

Key parameters to consider

• Solution maturity: mature, established global solution across all global markets, expanding at a steady pace

• Lifetime: around 25 years

• Technical constraints or pre-requisites: initial cost of installation, weather dependency

• Additional specificities (e.g. geographical, sector or regulation): local availability of sunshine and annual weather conditions may affect system efficiency, local use limitations

• Eventual subsidies available: local subsidies and tax breaks apply based on country of application

Implementation and operation tips

Solar thermal water heating system installation should be considered by local solution efficiency and conditions, annual weather conditions, size of installation required, maintenance requirements and cost of system implementation. Maintenance strategy must be adjusted to manufacturer guidance.

Wide scaling of this solution is progressing at a steady pace of 3-5% growth annually, although a far greater pace would be needed to meet climate targets.