Solar District Heating Market - By System (Small, Large), By Application (Residential, Commercial {College/University, Office, Government/Military}, Industrial {Chemical, Refinery, Paper}) & Forecast, 2022-2028

Solar District Heating Industry Analysis

Solar District Heating Market size was valued at USD 4.9 billion in 2022 and is projected to grow at 8.5% CAGR from 2023 to 2032. It is a type of heating system that uses solar energy to provide heat for a large number of buildings within a specific district or community. It involves the use of solar collectors, which are typically installed on rooftops or in fields, to collect solar radiation and convert it into heat. The heat produced by the solar collectors is then transferred to a heat storage system, which can be used to provide heating solutions to buildings within the district. This can be done through a network of pipes and heat exchangers, which distribute the heat to different buildings as needed.
 

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Strong policy incentives along with supportive regulatory frameworks for the deployment of renewable energy systems will boost the solar district heating market growth. Stringent energy-efficiency protocols along with promising regulatory reforms have instituted a favorable business scenario for the industry players. European countries including Denmark, Germany and France are actively promoting the usage of solar district heating under their national strategic energy planning programs. DH technology manufacturers across the region have been strengthening their market presence through extensive R&D activities and inorganic strategic implications.
 

COVID-19 Impact

The key challenge faced across the industry was the disruption to supply chains, which impacted the availability of solar thermal panels and other components needed for solar district heating market. This led to delays in projects and increased costs for others. In addition, the pandemic led to a decrease in energy demand in some areas, particularly in commercial and industrial sectors that were temporarily shut down or operating at reduced capacity. This reduced demand for heating, which impacted the economics of some solar district heating projects. However, increasing policy support, need to reduce greenhouse gas emissions along with transition to renewable energy will propel the market growth.
 

Solar District Heating System Segmentation

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The small-scale district heating market will expand at a CAGR of 4.5% through 2032. Increasing investments toward residential and commercial establishments along with growing penetration of DH systems across Tier II & III cities will boost the small-scale systems. These systems primarily have a capacity range between 3 – 10 kWth. The systems provide renewable heating facility to households, commercial buildings, and small & medium industries. The major heat source in these units include solar collectors, surplus heat sources and biomass systems. In addition, the introduction of more stringent GHG regulations coupled with the growing adoption of renewable sources to generate heat and energy will further elevate the solar district heating market revenue.
 

The large-scale solar district heating systems have been gaining importance in the recent years, owing to the increasing investments toward industrial and commercial establishments. These systems are usually built in district and block heating systems including multifamily buildings, hotels, industries, sports, and data centers. Furthermore, these systems have lower specific and alternative cost when compared with small systems. The rapidly changing surface temperature across the regions along with favorable regulatory norms toward sustainable DH technologies will boost the solar district heating market demand.
 

Solar District Heating Application Segmentation

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The residential solar district heating market accounted for over USD 2 billion in 2022. Increasing internal heat loads and the introduction of sustainable building solutions will boost the business environment. The acceptance of new products will also be aided by the development of temperature control systems, ease of parity, and high operational standards. Moreover, rising investments toward developing energy-efficient structures along with the robust expansion of heating networks across single-family houses and apartments will augment the business outlook.
 

The increasing floor space across commercial establishments to provide sustainable heating solutions and to meet the high energy demands has significantly strengthened the product adoption. Enormous potential for the utilization of SDH systems in Denmark, Germany, France, and Italy owing to fluctuating temperatures will complement the business growth. With technological advancements and continuous innovations, there has been a paradigm shift toward the smaller cities and towns for the adoption of sustainable DH systems across the residential and commercial areas.
 

Solar District Heating Regional Analysis

The Europe solar district heating market size will account for 185 PJ by 2032, attributed to government initiatives aimed at reducing carbon emissions and achieving the region's climate goals, such as the EU's target for district heating systems to meet 30% of the region's heating demand by 2030. Additionally, favorable government policies and increasing concerns around carbon emissions are expected to drive further growth in the industry. The increasing use of various renewable energy resources for heat generation is also anticipated to contribute to the market growth.
 

The increasing demand for automation and controls in flexible electrical systems and thermal storage will boost the solar district heating market size. Furthermore, the introduction of government standards, including zero-emission building targets, will encourage the product development. For instance, Denmark has set a target of a 70% reduction in emissions from new buildings by 2030. The shift towards sustainable energy sources in line with government efforts to mitigate climate change has created a favorable business environment in the region. Additionally, technological advancements and increased investments in research and development have led to the industry expansion.
 

Solar District Heating Industry Leaders

The key players operating across the solar district heating market include Aalborg CSP, Savosolar, Vattenfall AB, STEAG GmbH, Statkraft, Shinryo Corporation, NRG Energy, Inc., RWE, Ramboll Group A/S, Ørsted A/S, LOGSTOR A/S, Keppel Corporation Limited, Korea District Heating Corporation, Göteborg Energi, KELAG Energie & Wärme GmbH, and Fortum.
 

Solar District Heating Industry News

• In February 2021, Kelag Energie & Warne came into a heat delivery contract with Greenonetec for a solar district heating plant located in Friesach, Austria. This 4 MW project is worth USD 2.24 million. Which will be the largest turnkey project across the nation. This project enabled the company to expand its market presence across solar district market.
• In May 2021, Valmet supplied an automation system to Fortum’s district heating business in Finland. This technology will allow Fortum to build & enhance its district heating in Espoo, Kirkkonummi, and Kauniainen with the help of better management services and lead to lower C02 emissions & flexibility. In addition, it will strengthen the automation of district heating systems to accomplish the company’s network.
   

The solar district heating market research report includes in-depth coverage of the industry with estimates & forecast in terms of ‘PJ’ & USD’ from 2019 to 2032 for the following segments:

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Market, By System

• Small Systems
  • Residential
  • Commercial
  • Industrial
• Large Systems
  • Residential
  • Commercial
  • Industrial

Market, By Application

• Residential
• Commercial
  • College/university
  • Office buildings
  • Government/military
  • Others
• Industrial
  • Chemical
  • Refinery
  • Paper
  • Others

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • Poland
  • Russia
  • Sweden
  • Finland
  • Italy
  • Denmark
  • UK
  • Slovakia
  • Austria
  • Czech Rep.
  • France
• Asia Pacific
  • China
  • Japan
  • South Korea