8 reasons why solar thermal is accelerating the transition beyond fossil fuels

Consumers across the world are facing fluctuating energy costs. This uncertainty, combined with the release of the second installation of the IPCC report, Climate Change 2022: Impacts, Adaptation and Vulnerability - “a dire warning about the consequences of inaction [on climate change]”[i] – reiterate that we can no longer rely on fossil fuels for our energy needs. At over 50% of global energy demand[ii], our demand for heat energy, such as hot water and process heat for commercial and industrial buildings, is particularly important to consider.

The need for alternatives to fossil fuels, notably gas, oil, and coal, for heat in commercial and industrial buildings, is reaching a critical point. Businesses are facing the challenge of rising energy bills, with little certainty around how long volatility will endure, compounded by pressure from stakeholders to decarbonise.

Solar thermal is a viable and affordable technology that is already cutting carbon and energy bills across the world. The cumulated global capacity in operation in 2019 was 479 GW[iii], equating to carbon savings equivalent to 3.5 times Switzerland’s annual CO2 emissions[iv]. Increasingly, it is being recognised as a avenue to energy independence, working in harmony with other renewable solutions and replacing our reliance on fossil fuels.

How can businesses and industries around the world harness solar thermal to accelerate the transition away from fossil fuels?

1 - We can generate significantly more heat energy with solar thermal than with solar PV for the same area.

Solar thermal technology heats water using energy from the sun. According to Lightsource BP, "solar thermal can turn around 90% of radiation into heat, whereas solar PV has an efficiency of between 15% and 20%.[v]" Solar thermal therefore captures the potential heat energy that solar PV wastes and uses it to directly heat water, in turn reducing fossil fuel consumption.

Hybrid solar photovoltaic-thermal (PVT) technology involves the generation of heat (hot water) and electricity, from the same area. Therefore, when a business predominantly requires electricity (e.g. an office), solar PV can address their needs, however, if there is a significant demand for hot water or for both hot water and electricity (e.g. a hotel), a customer can reach better carbon and financial savings by installing solar thermal or solar PVT.

2 - Solar thermal requires minimal electricity and operations and maintenance (O&M) to run.

Solar thermal requires less electricity to run than most heating technologies and typically has lower maintenance costs[vi]. The IEA estimates that the annual fixed O&M cost for solar thermal is $135 lower than that of an air-air heat pump and $170 less than for a ground source heat pump[vii].

3 - Solar thermal enables energy independence, i.e. a reduced reliance on wider energy markets, in favour of self-generation.

For businesses with a constant demand for hot water throughout the year, installing a solar thermal system to supply 50% or more of their demand enables them to make crucial steps towards energy independence. This reduces their existing reliance on volatile wholesale energy markets: even if only 50% of a business’ demand is addressed by solar thermal, that equates to 50% less gas purchased and consumed; 50% more zero-carbon energy; and 50% of heat fuel bills offset after payback. Whilst solar energy typically performs better in the summer than in the winter, it still contributes a portion of energy supply all year round, alleviating a company’s total dependence on energy markets. Moreover, inter-seasonal storage can be integrated with solar thermal to balance out annual fluctuation in generation.

4 - Solar thermal generates zero carbon heat.

Solar thermal delivers zero carbon heat, playing a key role in the diverse, clean energy mix of the future. The impact is tangible; the 10 million solar thermal systems installed in Europe in 2019, generated 26 TWhth annually, equating to 7 MtCO2 savings per year.[viii] Whilst heat-pumps significantly decarbonise heat, until the electricity grid is 100% renewable, this technology still relies on gas, coal and other fossil fuel resources to work, and therefore is ‘low-carbon’, rather than ‘zero-carbon’.

5 - The solar thermal market creates jobs.

The growth of the solar thermal market results in an increase in jobs in the renewable energy transition. Local jobs as installers, manufacturers, consultants, engineers, project managers, marketeers, and designers, are created as demand for solar thermal increases. According to Solar Heat Europe, there were over 10 million solar thermal systems installed in Europe in 2019 and up to 20,000 jobs.[ix] Worldwide, in 2018, there were an estimated 650,000 jobs across production, installation and maintenance of solar thermal systems[x]. In the UK, there are already 7,100 jobs in the solar thermal sector and 7,500 jobs in solar PV[xi]. Furthermore, the UK Government plans to create 2 million green jobs by 2030[xii], 46% of which are estimated to be created in clean electricity and heat generation[xiii]. Clearly, as more businesses focus on carbon abatement and cost saving, more jobs will be created in the solar energy industry.

6 - Solar thermal deployment advocates a varied solution, rather than replacing one incumbent heat fuel source for another (e.g. gas for electricity).

Solar thermal works well in harmony with other solutions. For example, businesses with a significant demand for heat can install a heat pump to cover their space heat demands, alongside a solar thermal array to address their hot water or process heat demand. By choosing a multifaceted clean energy solution, businesses can reduce their total reliance on electricity and minimise risk of price volatility.

7 - Many industries can benefit from the cost and carbon savings of a solar thermal system.

Hotels, hospitals, care homes, , social housing developers, multi-family residences (e.g. apartments), pools and leisure centres, manufacturers (requiring low-grade process heat, e.g. food and beverage, paper and pulp) and district heating networks, , , all have a constant hot water demand throughout the year and therefore can benefit from solar thermal to address their hot water and process heat requirements.

Building uses, such as offices and schools, benefit less from solar thermal, as they tend to have a low demand for hot water (usually only bathrooms and kitchenettes) and typically, their demand is even lower in the summer when solar thermal generation is at its peak. In comparison, a hotel will have a constant demand for hot water, benefitting from solar thermal all year round.

8 - Solar thermal is the partner for green hydrogen to decarbonise heat.

If a business has a constant demand for low-temperature (under 120 °C) hot water and is seeking an affordable investment, solar thermal is a viable and affordable investment, which can complement hydrogen where appropriate. If you want to learn more about the benefits hydrogen offers on our path to a net zero economy, read more in our blog post explaining where hydrogen is most useful. (Link)

References

[i] https://www.ipcc.ch/report/ar6/wg2/resources/press/press-release/#:~:text=%E2%80%9CThis%20report%20is%20a%20dire,responds%20to%20increasing%20climate%20risks.%E2%80%9D

[ii] https://www.iea.org/fuels-and-technologies/heating

[iii] https://www.iea-shc.org/Data/Sites/1/publications/Solar-Heat-Worldwide-2021.pdf

[iv] https://www.iea-shc.org/Data/Sites/1/publications/Solar-Heat-Worldwide-2020.pdf

[v] https://www.lightsourcebp.com/2014/09/should-i-use-a-solar-pv-or-solar-thermal-system/#:~:text=The%20principle%20behind%20both%20types,for%20heating%20water%20or%20air.

[vi] Residential heat economics calculator – Analysis - IEA

[vii] Residential heat economics calculator – Analysis - IEA

[viii] http://solarheateurope.eu/2020/12/21/press-release-solar-heat-european-market-2019-report-continuous-growth-for-over-4-decades/#:~:text=The%20sector%20has%20been%20growing,systems%20installed%20in%20Europe%20today.&text=At%20the%20end%20of%202019,of%2052.9%20million%20square%20meters.

[ix] http://solarheateurope.eu/2020/12/21/press-release-solar-heat-european-market-2019-report-continuous-growth-for-over-4-decades/#:~:text=The%20sector%20has%20been%20growing,systems%20installed%20in%20Europe%20today.&text=At%20the%20end%20of%202019,of%2052.9%20million%20square%20meters.

[x] https://www.iea-shc.org/Data/Sites/1/publications/Solar-Heat-Worldwide-2020.pdf

[xi] https://www.irena.org/publications/2021/Oct/Renewable-Energy-and-Jobs-Annual-Review-2021

[xii] https://www.gov.uk/government/news/uk-government-launches-taskforce-to-support-drive-for-2-million-green-jobs-by-2030

[xiii] https://www.local.gov.uk/publications/creating-local-green-jobs