Europe’s solar thermal industry is bracing itself for another cold economic year, as consolidation in the building and solar energy sectors continues to hit new energy-efficient housing construction.
“We will probably experience our third consecutive year of decline or stagnation as our main markets are all in trouble,” said Xavier Noyon, secretary-general of the European Solar Thermal Industry Federation (ESTIF).
These markets include Germany, Italy, Spain, Austria and France. But despite what Noyon termed “this very gloomy context,” the signals from Greece were surprisingly positive.
“Even in a time of drastic crisis, capacity has been maintained and very high volumes of sales of solar thermal systems have been reported,” he told EURACTIV.
Europe’s solar photovoltaic (PV) market has also been hit by retrenchment, with its global market share falling from around 75% in 2011 to 55% in 2012.
“This is overall a healthy trend as PV technology is spreading around the world and not focusing on one region anymore,” said Frauke Thies, the policy director of the European Photovoltaic Industry Association (EPIA).
“But we have a clear, obvious and absolute decrease in Europe’s market share compared to the year before,” she added.
Thies blamed excess capacity which had led to fierce competition in the PV market, European plant closures and trade disputes.
Solar PV is a technology used to convert sunlight into power which, in large installations, can feed massive amounts of energy into the electricity grid.
By contrast, solar thermal is a narrower technology which mostly produces hot water and heating for individual households from solar panels that are placed on the rooftops and sides of buildings. It is closely associated with other renewable technologies used for heating in the construction sector, such as biomass, geothermal energy and heat pumps.
Heat is half of energy demand
Heat represents 50% of Europe’s final energy demand. For this reason, major retrofits and renovations involving renewable heating offer the greatest potential for emissions reduction – and long-term cost-savings and asset-appreciation.
But a lack of public information and consumer access to the significant revenues needed to pay for such refurbishments has hampered their uptake.
Without clear regulatory signals, the solar industry argues that big investors are less inclined to make large-scale investments, while smaller investors also hold back for fear of higher risk premiums.
Because the solar thermal industry is focused on individual investors as well as large fund-holders, this regulatory uncertainty creates a ‘bottleneck’.
“We see a lot of expectation from consumers,” Noyon said. “They’re waiting for signals from the authorities and delaying their own investments and that is not feeding the system in the correct way.”
He added: “You should not underestimate the mixed messages that the debate on 2030 targets sends to individuals about what choices they should make.”
The EU’s Green Paper on climate targets for 2030 received a lukewarm reception from some in the energy efficiency community for its perceived lean towards one over-arching greenhouse gas reduction target – rather than the 2020 package that also included energy efficiency and renewables.
There is a generalised frustration that inconsistent and fragmented policy measures are delaying the arrival of an integrated European smart grid which could one day allow ‘prosumers’ to sell their electricity they generate back to power companies.
Industry insiders say that the sector would also be helped in the short-term by a harmonisation of energy performance certificate standards and national renovation strategies by EU states that favoured deep retrofits.
Building renovation rates in Europe make up approximately 1% of the total housing stock, according to Building Performance Institute Europe.