1

RenewableHeating Technologies

2008

Andrew GilesAbdel Eljidi

14th May 2009

Starting: 15:00 hrs Brussels Time (GMT+1)14:00 hrs UK Time (GMT)09:00 hrs New York Time

slides will be recorded and presented on www.solarthermalworld.org

2

Who are we?

Andrew Giles, MA

General ManagerBSRIA - World Market Intelligence (WMI)

At BSRIA for 24 years

Abdel Eljidi

Senior ManagerBSRIA - World Market Intelligence (WMI)

At BSRIA for 4 years

3

Heating and renewables

Air conditioning and refrigeration

IT cablingFM and contracting

• Turnover £2.1 million ($3.8m)• 60% market reports• 40% private client

• Research across 94 countries

• 30 permanent multi-lingual staff

• Offices in China, France, Spain, Germany, partners in other countries

• Global network of associates

Water conservation & Sanitary ware

BSRIA Worldwide Market IntelligenceBSRIA Worldwide Market Intelligence

HVAC LightingFire AlarmCCTVAccess Control

Energy Management

Central Workstation

Remote Access

HVAC LightingFire AlarmCCTVAccess Control

Energy Management

Central Workstation

Remote Access

Intelligent Building controls - Security / Fire / Environmental

4

Introduction§ Europe: 14 countries

Austria, Belgium, France, Germany, Greece, Italy, Portugal, Spain, Switzerland, Turkey, UK, Croatia, Hungary, Poland

§ World: Europe (14) plus U.S.A., China, Brazil, South Korea.

§ Flat plate + Vacuum tubes (only glazed collectors)

5

Multiclient Methodolgy – 2 pronged attack

RESEARCH FIELDWORKPrimary research§ Annual study now in fifth year§ Face to face interviews in every

country (“expert to expert”)§ Telephone interviews§ Database from headquarters§ Global market specialist§ Strong QA procedures§ Country specialists

Secondary: Online and desk research

GLOBAL ANALYST§ Abdel Eljidi (global market

specialist) attends exhibitions, conferences, seminars

§ Media monitoring§ Constant discussion with

network of industry experts» Japanese contacts» Utilities» Institues» Manufacturers

§ Web research ( products and companies)

§ QA research reports

6

What is the impact of alternative heating technologies

on traditional heating markets?

7

Solar Thermal markets update 2008

8

Changing nature of the HVAC industry in 2008/9

§ Lower growth of boiler sales in large European markets

§ Strong growth of renewable varies across technologies and markets

§ Micro-CHP in field trial phase in Europe 2009/10

§ German solar market is booming with new subsidies in place

§ Investment in renewable technologies strong in 2008

§ Stronger presence of Japanese AC companies

§ Decreasing heating load for space heating in the new build insulation

§ Likely to see some consolidation in HVAC market in 2009

9

Market Drivers• Concern fossil fuel supplies maybe disrupted (Russian winter blues, political instability in the Middle East)• Prices of oil/ gas likely to increase to similar peaks in 2008• Construction slowing down –US & Europe• Nuclear energy is becoming popular as alternative • Increasing environmental awareness to climate change• More stricter building regulations (EPBD, EuP, 2020…) • Race by HVAC mfrs to develop renewable products/ partnerships • Various regional/ national subsidies to kick start the market!• Promotions by utilities• The role of some utilities changing from energy supply to energy management

10

Diversification on all fronts

Renewables Specialists

Air conditionin

gHeating

Heat emitters

Air conditioning

M-CHPHeat Pumps

Utilities changing …

11

Diversification of Leading Boiler Manufacturers, 2008

Boilers Water Heaters A/C Solar

ThermalHeat

pumpsHeat

Recovery Biomass Solar PV Micro-CHP / FC

Bosch Therm. trials

Vaillant Group R & D

Viessmann 2007 trialsMTS trialsBAXI ?? ??De Dietrich-Remeha ?? ?? trialsRielloFerroliStiebel Eltron R & D

1212

Key findings

13Solar supply is much more than a matter of adding some solar collectors

Plenty of extra pipework, valves, pumps and controls

Impact on SOLAR THERMAL

14

Various Incentives

National Federal/Regional

Green Loans

public agencies

Utilities

Tax credits

Cheaper tariffs

Feed in tariffs

loans

Grants

Lower VAT

Local

15

Selected Incentives schemes§ Different situation regarding incentives in various countries.

Important driver together with legislation.§ Germany, Austria,Italy, France among others offer incentives.

National and regional.§ Germany: MAP (“Marktanreizprogramm zu Gunsten

erneuerbarer Energien“) by BAFA (minimum €410 per installation)

§ France: 50% tax credits§ Italy: 55% tax credit up to 60,000€ (uncertainy for the future)§ Austria: varies from 600€ to over 3,000 €§ No incentives in Greece, Turkey and limited in the UK§ But in some countries (Spain, Israel) solar is becoming

mandatory

16

World markets – Solar Thermal

Worldwide Reach

17

World markets – Heat Pumps

Limited penetration

18

China €1006.5M

Others €93.7M

Turkey €10.5MSouth Korea

€9.8M

Poland €9.4M

UK €8.3M

France €6.3M

Others €16.0M Germany

€22.1M

Italy €11.3M

Vacuum tube, value, 2007/8

€ 1,100 million

18.9 million m2

19

Flat plate collector, value 2007/8

Others €530.2M

China €252.0M

Germany €113.3M

Spain €59.8M

Brazil €55.8M

Italy €51.0M

Greece €46.6M

Turkey €45.3M

France €41.4M

Austria €30.5M

USA €26.1M

Others €60.4M

€ 782 million

6.3 million m2

20

US Solar Water Heating Market Trends & Forecasts 2003-2010

Sq.meters

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2003

2004

2005

2006

2007

2008

2009

2010

Excluding swimming pool collectors

21

USA solar collector market 2008

Alternate Energy

Technologies

SunEarth

Radco Products

Heliodyne All others

Type of collectors Volume m2 Value € million

(at MSP)

Flat plate collectors 200,560 31.3 Vacuum tubes 8,590 1.7 Total 209,150 33.0

22

European flat plate market size, in€ million (MSP), 2008

2008: € 546 million

UK3%

Croatia0.3%

Hungary0.3% Poland

2%

Austria6% Belgium

2% France9%

Germany28%

Greece9%

Italy14%

Portugal2%

Turkey8%

Switzerland2%Spain15%

23

European vacuum tubes market size, in € million (MSP), 2008

2008: € 100.4 million

Switzerland1%

Portugal1%

Spain4%

Turkey10%

UK11%

Croatia0.4%

Hungary2% Poland

14%Belgium

2%

Austria1% France

8%

Germany27%

Greece2%

Italy17%

24

European solar thermal market(14 countries), in thousand m2, 2003-2012

0.0

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

7,000.0

8,000.0

2003 2004 2005 2006 2007 2008E 2009F 2010F 2011F 2012F

25

European flat plate market, 2008, volume in m2

2008: 3,751,000 m2

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

26

European vacuum tubes market, 2008, volume in m2

2008: 596,000 m2

020,00040,00060,00080,000

100,000120,000140,000160,000180,000200,000

27

Solar market trends and forecasts,2003-2012

50%

0

500

1,000

1,500

2,000

2,500

3,000

German

y

Turkey

Greece

Austria

Spain

South

Korea

France Ita

lyUSA

Poland

Switzerl

and UK

Belgium

Portug

al

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

28

European, type of circulation, 2008

Thermosiphon34%

Drainback2%

Forced Circulation (with

pump)64%

29

European end-users, 2007

Residential new build36%

Residential replacement

10%

Residential first time installation

42%

Non-residential replacement

1%

Non-residential new build

5%

Non-residential first time

installation6%

30

European applications, 2007

Commercial space heating (combi)

1%

Swimming pools (excluding unglazed

collectors)2%Commercial hot water

heating9%

Domestic space heating (combi)

19%

Domestic hot water heating

69%

31

Europe, type of installation, 2007

0%

20%

40%

60%

80%

100%

Austria

Croatia

Greece Ita

ly

Poland

Portug

al

Hunga

ry

Belgium

German

y

France

Spain

Switzerl

and

Turkey UK

Stand alone installation –unassisted by other heating systemsSolar thermal system combined with heat pump –total renewable solutionSolar thermal system assisted by electric water heaterSolar thermal system assisted by a boiler (Gas/ oil/ Biomass)

32

Germany, flat plate market shares, 2008

Solvis

Sunset (Chromagen)

Weishaupt (Schweizer)

Other Manu-facturers

Pro Solar

Vaillant

Thermosolar

Broetje (Baxi)

Schueco

GC Group

Sonnenkraft

Wagner

Other Importers

BBT

Viessmann

Wolf (Centrosolar)

2008: 1,850,000 m2

33

Germany, vacuum tubes, 2008

Wagner

Consolar Solvis

BBT

Others

Paradigma

Solar TechnologiesElco-

Kloeckner

Vaillant

Viessmann

2008: 160,000 m2

34

UK flat plates, market share, in volume, 2008

Total: 47,900 m2

Solar Tw in

Genersys

Wolf

Viessmann

Filsol

Others

AES Solar

Sundw el

35

UK vacuum tubes, market share, in volume, 2008

Total: 30,000 m2

Collectra AG (by Smart Energy)

Others

Vaillant

Sonnenkraft

Viessmann

Rayotec

Kingspan Renew ables

36

Commercial and IndustrialApplications

Untapped market!

37

Opportunities in the Commercial and Industrial Markets

§ Natural gas/ oil remain the main fuel but desire to phase out oil systems§ Collective Solar market growing but focus on hot water§ Share of renewables in industrial applications very low, mostly PV§ Large capacity high temp. heat pumps (CO2) limited to residential use§ Current various CSP systems still too costly and have limitations§ Restricted due to space required: cannot fixed securely on roofs or integrated

in the same way as ordinary flat plate/ evacuated tubes collectors§ Low awareness to solar heat potential in industrial/ commercial segments§ Several industries could benefit from medium to high temp renewables

systems, where pressure on reducing energy costs is high.§ Lack of incentives for commercial and industrial processes

38

Key Target Applications for high efficiency collectors

39

Solar coolingMarket overview

» Currently over 100 systems installed in Europe» Most of solar suppliers interested in this segment » Small number of manufacturers, mostly small/ medium companies <10 » A combination of absorption/ adsorption chillers below 100kW » For optimum efficiency solar collectors have limited use depending on location» Vacuum tubes offer better potential but have short life span (fragile)» Southern European (Italy, Spain, Greece) key target for market deployment» The hotel and leisure industry, public buildings offer the largest potential» Can reduce pressure on the electricity grid during peak times in the summer» Clean, no refrigerants» Commercial launch is dependent on higher fossil fuel costs and politics

40

Solar cooling 1Attractiveness of Solar cooling:

»The technology appeals to end users due to lack of harmful refrigerants no GHG»Can reduce pressure on the electricity grid during peak times in the summer»Commercial launch is dependent on higher fossil fuel costs and politics»Most manufacturers planning commercial launch in 2009/10

Current solar assisted cooling systems:»Climatewell: 10 kW, suitable for existing flat plat collectors <80C»Sonnenklima (Suninverse): 10kW cooling, works on absorption principle with temp from 55C to 105C, suitable for small buildings below 200m2 »Sortech AG (7.5kW)»Yazaki (Japan): now with fully fledged European office, mostly focused on OEM»Solarctic

41

Solar cooling 2

Potential competition:

»Cheap and efficient electrical heat pumps subject to cheap electricity price »Gas engine heat pumps (GHP): can do cooling + hot water –proven technology»GHP are successfully promoted in Italy, Spain, and recently Germany and France»GHP are supplied by some leading A/C manufacturers: Sanyo, Aisin, MHI »Hybrid systems: Gas absorption systems: Rotarktika (Spain), Vaillant (Germany)»Hybrid biomass systems: cheap fuel as an alternative to solar thermal in low radiation areas (Austria, Germany)

42

Process heat§ High potential in segment below 300¢ºC

» Several industries could benefit§ Currently lacks awareness§ Almost 1/3 of process heat is below 200C, suitable for roof installation§ Current systems:

» Linear Fresnel: PSA AG (Germany)» Requires large area of collectors» Not suitable for roof installations» Vulnerable to wind» Peak power: 500W/m2» For solar cooling: 1kWp/2m2

§ R&D on reducing thermal loss of flat plate collectors (70-120C)§ R&D into heat storage (sorption heat storage)§ Large scale solar for district heating <1% (some 15 plants so far >500m2 area)§ Planned commercialisation 2009/10

43

Big Changes on the way …

•Solar thermal to be mandatory in new buildings •Changing focus, from new build to renovation•Big opportunities in the non-residential market•Evolution towards mass market •Energy storage becoming important•Hybrid solution on the rise –solar thermal + HP•Micro-CHP – a boiler progression but likely to remain niche systems