Solar Thermal Market

The global Solar Thermal Market is valued at USD 31.3 Billion in 2024 and is projected to reach a value of USD 53.21 Billion by 2035 at a CAGR (Compound Annual Growth Rate) of 4.95% between 2025 and 2035.

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The key factors driving the growth of the solar thermal market are increasing installed capacity and rising renewable energy demand. The increase in installed capacity is driven by the increasing popularity of solar thermal technology in various applications, such as district heating, industrial-grade cooling, and water heating. The global installed capacity for solar thermal in 2021 and 2022 is projected to be 120,000 MW. Rising renewable energy demand is also contributing to the growth of the solar thermal market. The major drivers for the growth of the solar thermal market are increasing government initiatives to reduce carbon footprints and increasing demand from industrial sectors such as mining and manufacturing. Solar thermal systems have lower installation costs than traditional heating systems, which makes them an attractive option for residential and commercial applications. The key factors driving the growth of the solar thermal market include increasing awareness about its benefits, rising demand from end users such as utilities and renewable energy providers, and increasing government support. One of the main reasons for the growth in the solar thermal market is the declining cost of solar panels. Solar panel prices have decreased by 60%, making solar thermal technology an increasingly affordable option. In addition, many countries are moving away from traditional energy sources like coal and oil, which means there is an increasing demand for clean energy solutions like solar thermal technology. Several applications for solar thermal technology have yet to be thought of.

For example, some scientists are exploring the possibility of using solar thermal technology to create artificial suns. This could be used to study space weather or to create sustainable energy sources on Earth. The growth can be attributed to the government initiatives such as the Jawaharlal Nehru National Solar Mission (JNNSM) and the Clean Energy Development Fund (CEDF). The JNNSM aims to install 100 gigawatts (GW) of solar thermal power by the end of 2022, while the CEDF focuses on financing renewable energy projects in India. SunPower Corporation has invested $1 billion in a manufacturing facility that will produce photovoltaic (PV) modules using its high-efficiency crystalline silicon technology.

The high installation cost has been limiting the adoption of solar thermal technology in certain regions owing to its higher upfront capital expenditure. Moreover, decreasing PV module prices are hampering the growth of the solar thermal market as these panels are a major component of solar thermal power plants. Some major challenges the solar thermal market faces include high equipment costs and difficulty in achieving low installation costs. However, innovative technology developments and aggressive marketing campaigns by key players are expected to overcome these challenges. Solar thermal technology has huge potential to grow in popularity because there is still plenty of room for improvement. For example, solar thermal systems can be expanded to cover larger areas, which could significantly save energy costs. Solar thermal technology is becoming more popular because its environmentally friendly and doesn't produce any emissions. In addition, many people are looking for ways to reduce their carbon footprints.

New Opportunities

The solar thermal market is snowballing, and there are several reasons for this. First, the cost of solar panels has been decreasing steadily, which has made solar thermal more affordable for homeowners and businesses. Second, the increasing popularity of rooftop solar systems has led to an increased demand for solar thermal products. Third, developing new solar technology, such as DRAM (Dynamic Random Access Memory) capacitors and CSP (concentrated solar power) plants, has made solar thermal more efficient and reliable. Fourth, government subsidies have helped to drive the growth of the solar thermal market in certain countries, such as China and India. Overall, the growth of the solar thermal market is exciting news for those interested in sustainable energy sources. Solar thermal is a clean source of energy that can be used to generate electricity or heat water. It is also relatively inexpensive compared to other forms of renewable energy, making it a good option for small businesses and homes that want to invest in green energy solutions.

Top Market Trends

• The main driver of this growth is the increasing demand for renewable energy sources, which are becoming more and more expensive to produce. In addition, the decreasing cost of photovoltaic (PV) cells has made solar thermal technology more competitive than ever before.
• The rise in demand for decentralized energy solutions.
• Another important trend expected to propel the growth of the solar thermal market is the increasing interest in Off-Grid Solutions. Many consumers across various geographies are looking for better and more affordable ways to generate power. This is especially true in regions not well-served by traditional electricity grids.
• Another factor contributing to the growth of the solar thermal market is technological advancement. Recent developments, such as thin-film technologies, have made solar thermal systems more efficient and less expensive to install. This has led to increased demand from customers who want easy operating and maintaining systems.

Market Segmentation

The global Solar Thermal Market is segmented based on Application, End Use, Collector Type, and Region. Based on Applications, the market is segmented into Hot Water Systems, Solar Combi Systems, Swimming Pool Heating, and Other Applications. In addition, based on End Use, the global Solar Thermal Market is segmented into Residential, Commercial, and Industrial. Furthermore, based on the Collector Type, the market is segmented into Evacuated Tube Collector, Flat Plate Collector, Unglazed Water Collector, Air Collector System, Thermosiphon Solar Heating System, and Pumped Solar Heating System. Likewise, based on Region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Based on Application

The hot water systems segment is expected to be the largest market for solar thermal systems during the forecast period, owing to the high demand for hot water across various residential, commercial, and industrial sectors. The solar combi system segment is expected to be the second largest contributor to the growth of the solar thermal market in terms of revenue. The market is anticipated to grow at a CAGR of 15.6% from 2021 to 2028. This growth is mainly due to the increasing demand for efficient and reliable solar combi systems that can simultaneously generate electricity and heat. The swimming pool heating segment is expected to be the third largest market for solar thermal systems during the forecast period, owing to the increasing adoption of these systems for heating water in swimming pools. This segment is expected to grow at a moderate rate during the forecast period as technological advancements help improve the performance of solar thermal systems in heating swimming pools. The increasing popularity of swimming pools among people across geographies also contributes to this market segments growth.

Based on End Use

The residential segment is expected to account for the largest share of the solar thermal market in terms of revenue during 2023-2035. This segment is projected to account for the largest share of the solar thermal market with a CAGR of 17%. The growth of this market is attributed to the increasing awareness about the benefits of solar thermal technology among people, especially in developed countries. Commercial and industrial segments are also expected to witness rapid growth due to the increased adoption of solar thermal in heating and cooling systems. Commercial: This segment is projected to account for the second-largest share of the solar thermal market with a CAGR of 13%. The increasing demand for renewable energy in commercial buildings is likely to boost the market growth in this segment. Industrial: This segment is projected to account for the smallest share of the solar thermal market with a CAGR of 7%.

Based on the Collector Type

Evacuated tube collectors are expected to account for the largest share of the market during this period. This is due to their high installed capacity and cost-effectiveness. Flat plate collectors are also expected to snowball during this period owing to their wide application range and low installation cost. Unglazed water collectors are likely to experience the fastest growth due to their increasing popularity as green building materials and increasing awareness about their environmental benefits. Air collector systems are expected to grow slower than other collectors, primarily because of the higher costs associated with these systems. Thermosiphon solar heating systems are also expected to grow slower than other collector types owing to the rising prices of solar energy technologies. In contrast, pumped solar heating systems are expected to account for the fastest growth in the market during this period owing to their lower installation costs and high energy output.

Based on Region

North America is expected to lead the global solar thermal market with a share of more than 36% in 2035. The key factors driving the growth of the North American solar thermal market are increased investment in renewable energy and increasing demand for clean energy solutions from governments and businesses. In addition, increasing installations of solar thermal plants in California, Arizona, and Nevada are also contributing to the growth of this market segment. Europe is estimated to be the second largest regional market for solar thermal, with a share of more than 26% in 2028. The key factors contributing to the growth of the European solar thermal market include government initiatives such as the Renewable Energy Directive and Feed-in Tariffs (FITs) for renewable energy, increasing installed capacity of photovoltaic systems, and growing demand from residential and commercial buildings. Asia Pacific is expected to be the fastest-growing regional market for solar thermal, with a CAGR of more than 14% during 2021-2028. Latin America is expected to be the smallest market, with a growth rate lower than other regions. The Middle Eastern & African market is expected to grow at a CAGR of 16% from 2021 to 2028. This growth can be attributed to the increasing demand for solar thermal systems in countries such as Saudi Arabia and Egypt, which are witnessing high economic growth.

Competitive Landscape

The key players in the Global Solar Thermal market include- Solareast Holdings Co. Ltd. (China) and others.

Recent Developments

• Some leading solar thermal players are concentrating on developing new products such as advanced absorbers, improved tracking mechanisms, and integrated solutions for large-scale installations. These companies are also focusing on expanding their global footprint through mergers and acquisitions (M&A) deals.
• The Indian government has initiated several projects in the solar thermal sector to increase its share in the overall renewable energy market. For instance, the government announced a Rs 1,000 crore investment for setting up 100 gigawatts (GW) of solar thermal power projects by 2022. This initiative would help India surpass France as the worlds third-largest producer of solar energy.
• Hanwha Q Cells is one of the leading players in the solar thermal market with a share of 28%. The company has an installed capacity of 377 MW across Europe, North America, and Asia Pacific.
• Yingli Green Energy Holding Company Limited has invested $2 billion in a manufacturing facility that will produce multi-crystalline silicon PV modules using its advanced technology.

Segmentation of the Global Solar Thermal Market