The European solar thermal systems (STS) market earned revenues of over EUR 958.9 million in 2008 and is estimated to reach EUR 2.2 billion in 2014, according to a recent research report from Frost & Sullivan.
The market for solar thermal systems
(STS) in Europe has witnessed significant developments at all levels in the
last four years, analysts said.
"Currently, the key driver for the market in Europe is government
support for STS in the form of financial subsidies, tax credits, and
regulatory reforms," says Frost & Sullivan Research Analyst Hammam Ahmed.
"The market for STS is highly responsive to fluctuations in the provision
of governmental support."
For instance, the Italian market witnessed strong growth levels
following increased government subsidies for STS. On the other hand, the
German market declined significantly as a direct result of a temporary
disruption to these subsidies and recovered as soon as they became
available again.
High growth in the STS market, particularly over the last four years,
has attracted several new participants that are promoting the industry and
making STSs accessible to a wider customer base, the report states.
Cost is the primary hurdle confronting the STS market. Despite the
financial incentives that solar thermal installations receive, the overall
price is still high and the recoup period can go up to 20 years in some
regions.
Additionally, an STS is only a complementary alternative and not a
substitute for a traditional hot water system. Therefore, it is not a
viable investment option for most end users, especially in countries where
conventional energy prices are low.
"In many countries, particularly in northern Europe, the solar yield
can be as little as 40%," explains Ahmed. "Additionally, the
up-front cost of a solar thermal system continues to be expensive."
According to the report, companies should work on developing low-cost and effective solar
thermal systems, particularly in the current economic conditions in Europe.
On the whole, with escalating competition, both manufacturers and
installers will be forced to reduce prices and the overall price of STS
will go down.
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