SOLAR THERMAL COLLECTORS MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)
The solar thermal collectors market is estimated to be valued at USD 30.19 Bn in 2024 and is expected to reach USD 52.08 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 8.1% from 2024 to 2031.
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Rising concerns over environmental pollution and the need to reduce dependence on fossil fuels are expected to drive significant demand for solar thermal collectors during the forecast period. The market is witnessing favoring trends such as growing emphasis on renewable energy resources and policy-level support through subsidies and incentives. Additionally, the falling prices of solar thermal collectors along with product innovation leading to higher efficiencies are increasing their affordability and adoption rates globally. However, high initial installation costs remain a major limiting factor for the market.
Growing concerns around climate change
As climate change concerns continue to dominate global discussions, the need for cleaner energy sources has become more imperative than ever. Solar thermal technology provides a sustainable solution to meeting rising energy demands while reducing carbon footprint. With temperature records being broken almost every year and extreme weather events occurring more frequently, many nations have pledged to transition to renewable resources as part of their commitment under the Paris Agreement. This has led various governments to offer fiscal incentives for installations of solar thermal collectors. Multiple studies have also highlighted how harnessing solar heat can help offset carbon emissions from fossil fuel-based water and space heating. The economic benefits of solar thermal are further driving its adoption. The overall market force of climate action and sustainability goals will remain a key propeller for greater installations of solar collectors globally in the years to come.
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Affordability advantage over other clean alternatives
While solar photovoltaic remains the frontrunner in terms of overall investment in the renewables space, solar thermal technology offers a relatively more affordable solution for utilities and commercial establishments seeking to meet high hot water and process heat demands. Solar collectors provide heating at lower costs than wind or biomass projects of equivalent capacity. Even when compared to other solar technologies, solar thermal excels on the cost front for applications that require heat below 150°C. Recent technological enhancements have further narrowed the pricing gap with natural gas boilers and fuel oil-based systems. With raw material costs stabilizing and operational expenditures declining, solar thermal is increasingly completing on economics with conventional alternatives. This affordability aspect is convincing more industrial and commercial consumers who are looking to supplement their energy needs through renewable sources but on a tighter budget. As energy expenses continue their northward trend, solar thermal is poised to gain additional traction due to favorable life cycle cost profiling.
Key Takeaways from Analyst:
The global solar thermal collectors market is expected to witness steady growth driven by supportive policies and regulations promoting renewable energy usage worldwide. Asia Pacific, led by China, will continue dominating the market given significant focus on solar power generation and strong government backing.
Opportunities exist in other developing nations as well as they aim to diversify energy sources. One of the main drivers for the industry is the growing need for alternate sources of energy coupled with falling prices of solar products making them more viable investment. However, concerns around intermittency of supply from solar remains a challenge. The market might face some restraints in terms of lack of adequate policy push in certain regions.
Though developed nations will see gradual demand, the overall market outlook is positive with promise of improved performance and rising applications in buildings. While the residential sector will drive robust uptake, the commercial and industrial segments offer lucrative potential. Leading manufacturers are investing in product innovation and partnerships to expand global footprints. On the whole, as concerns around environment sustainability intensify collective efforts by industry and governments are likely to accelerate the adoption of solar collectors worldwide.
Market Challenges: High initial installation costs
The high initial installation costs involved in setting up solar thermal collectors are one of the key factors restraining the growth of the global solar thermal collectors market. Setting up an efficient solar thermal system requires significant capital investment which impacts its mass adoption. Solar thermal collectors need to be installed correctly to ensure optimal performance throughout their lifespan. This involves careful planning and installation of the collector panels, insulated hot water storage tanks, mounting structures, piping infrastructure for fluid circulation etc. Professional installation services further increase costs. According to the Joint Research Centre of the European Commission, installation and balance of system costs typically account for 40-60% of the total solar thermal system costs. The upfront costs discourage many homeowners and building owners to make the switch to solar thermal.
Market Opportunities: Development of CSP with thermal storage
The development of concentrating solar power (CSP) with thermal energy storage has huge potential to drive growth in the global solar thermal collectors market. CSP utilizes mirrors to concentrate sunlight to heat a working fluid which can be used to power a turbine and generate electricity. However, one limitation is that it only generates electricity when the sun is shining. Adding thermal energy storage overcomes this intermittency challenge by allowing the storage of heat for several hours and enabling the generation of power even when the sun is not out. This gives CSP with storage great flexibility to meet peak demand periods. With suitable incentives and cost reductions, it could replace conventional power plants that emit greenhouse gases.
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Insights by Type: Increasing adoption due to their higher efficiency
In terms of type, evacuated tube is expected to contribute 30.5% share of the market in 2024. Evacuated tube collectors have seen increasing adoption due to their higher efficiency compared to other collector types. The key aspect driving their popularity is the improved insulation achieved through the evacuated chambers between the inner and outer glass tubes. This vacuum insulation allows for significantly less heat loss, translating to enhanced capture of solar energy even in relatively cooler weather conditions or diffuse light. As climate change concerns rise, consumers are looking for the most effective solar thermal solutions to minimize carbon footprints from water and space heating needs. The high performance of evacuated tube collectors in varied weather makes them especially suitable for regions with less favorable solar irradiation levels throughout the year.
Another factor propelling the evacuated tube segment is its durability and longer operational lifespan. The vacuum ensures proper insulation for over 25 years with minimal decrease in collection capabilities. This translates to reliable long-term returns on investment and total cost of ownership. Manufacturers have also optimized the designs including higher absorber coating efficiency and incorporation of heat pipes for swift transference. The sleek aesthetics of evacuated tube designs with uniformly aligned transparent tubes have also increased the acceptance for both commercial and residential applications. With continuous technological advancements focusing on improved vacuum levels, absorber coatings and heat removal, the evacuated tube segment is expected to further cement its leading position.
Insights by Application: Growing sustainability focus
Residential contributes the highest share of the solar thermal collectors market. This segment is expected to contribute 61.7% of the market share in 2024. Individual homeowners and communities are increasingly looking to harness solar energy both for price stability of energy needs and reducing their carbon footprint. As awareness about climate change impacts spreads, more households want to contribute to sustainability efforts however small. The upfront costs of installing solar water heaters or space heating systems is outweighed by annual savings on utility bills and lower long term operating expenses. In developed nations with subsidy schemes and tax rebates, the effective prices are even more competitive compared to conventional systems.
Moreover, systems designed for residential rooftops are more customized to aesthetically blend with the architecture and needs of a home. Large multifamily units and planned communities have also installed centralized solar thermal facilities to cover hot water or heating for multiple homes. The modular designs encourage do-it-yourself installation and maintenance to a certain extent, increasing accessibility. With promotion through net-zero energy initiatives, more builders are incorporating renewable solutions right from the construction phase. As a result, residential solar collectors have proliferated rapidly in recent years alongside growing environmental consciousness of homeowners and property developers. Their simple payback periods and community benefits make them the largest sub-segment driving present demand.
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North America has been the dominant region in the global solar thermal collectors market. The region is expected to account for 36.7% of the market share in 2024, owing to strong industry presence and supportive government policies for solar energy adoption. The U.S. market in particular has seen sizable investments from major players to ramp up manufacturing capabilities in order to cater to the growing demand. With California leading the solar thermal installations in the country, the U.S. accounts for the largest market share in the region. Strong initiatives by governments to incentivize the use of renewable energy sources have led to significant growth of the residential solar thermal segment. Rebates and tax credits on collectors and systems have encouraged homeowners to switch to solar in states with high insolation levels. Rising environmental consciousness coupled with reduced payback periods have further boosted installations across residential and commercial spaces.
On the other hand, the Asia Pacific region has emerged as the fastest growing regional market for solar thermal collectors. China, being the world's largest solar PV panel manufacturer, has massively scaled up its solar thermal capacity over the past decade to meet growing heating needs in the country. Its strategic emphasis on developing domestic renewable suppliers has benefited local collector manufacturers as well. Rising demand from other Asian nations has encouraged Chinese manufacturers to increasingly focus on exports. India and Japan too have demonstrated encouraging market potential via supportive net metering programs and fiscal incentives for industrial process heating applications. With improving living standards raising energy consumption, other developing countries in Southeast Asia and the Middle East are also embracing solar thermal as a cost-effective alternative. The presence of major international brands and export-oriented local manufacturers have made the Asia Pacific market extremely cost-competitive. This is attracting customers across smaller commercial and residential segments in the region. Cheaper system costs encourage higher adoption rates compared to other parts of the world. With strong government directives, solar thermal looks poised to scale further heights in Asia Pacific.
Solar Thermal Collectors Market Report Coverage
| Report Coverage | Details | ||
|---|---|---|---|
| Base Year: | 2023 | Market Size in 2024: | US$ 30.19 Bn |
| Historical Data for: | 2019 To 2023 | Forecast Period: | 2024 To 2031 |
| Forecast Period 2024 to 2031 CAGR: | 8.1% | 2031 Value Projection: | US$ 52.08 Bn |
| Geographies covered: |
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| Segments covered: |
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| Companies covered: |
Alternate Energy Technologies LLC., TVP Solar , Ouraset, SunEarth, Greenonetec Solarindustrie GMBH, Absolicon Solar Collector AB, Sunerg Solar s.r.l. , Solimpeks, Heliodyne Inc., HTP Comfort Solutions LLC, Photon Energy Systems Limited, Solareast Holdings Co Ltd., Greenonetec Solarindustrie GmBH, BTE Solar Co Ltd., and Linuo Ritter International Co. Ltd |
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*Definition: The solar thermal collectors market consists of companies that manufacture and sell solar thermal collectors, which are devices used to absorb sunlight and convert solar energy into useful thermal energy. Solar thermal collectors trap the sun's heat in tubes containing a fluid. The most common types of solar thermal collectors are flat-plate collectors and evacuated tube collectors. They are used to provide hot water for homes, commercial buildings and swimming pools or for space heating through solar space heating systems. The goal of solar thermal collectors is to harness the sun's renewable energy for domestic hot water and heating applications.
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About Author
Sakshi Suryawanshi is a Research Consultant with 6 years of extensive experience in market research and consulting. She is proficient in market estimation, competitive analysis, and patent analysis. Sakshi excels in identifying market trends and evaluating competitive landscapes to provide actionable insights that drive strategic decision-making. Her expertise helps businesses navigate complex market dynamics and achieve their objectives effectively.
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