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The significant adoption of solar thermal worldwide is primarily due to the rising preference for clean energy. Governments around the world are encouraging the adoption of solar thermal power systems to reduce costs, improve performance, and reduce carbon footprint. For example, the Danish Ministry of climate provides data that in 2019 more than 50% of its electricity was generated by wind and solar power. They are also installing thermal panels in most public places as these panels are comparatively more energy-efficient than the photovoltaic ones.
The increasing demand for clean energy has propelled the demand for alternative energy sources such as solar thermal. As per the analysis done by Fortune Business Insights, the market value in 2018 stood at 496.52 GW and is projected to hit 767.73 GW by 2026 while exhibiting a 5.6% CAGR during the forecast timeline. The application of this type of thermal energy is rapidly being adopted in residential as well as commercial spaces. This development has been possible with the extensive advancement in the technology of transferring heat from fluid to steam. The rising preference towards the use of renewables has majorly contributed to the growth of this market. Currently, China is one of the biggest leaders in this market. In March 2021, the country built its largest molten solar thermal power station in Gobi Desert in Dunhuang City.
The impact of the COVID-19 pandemic was drastic owing to the fact that the production of thermal panels was halted during the lockdown. Even though the energy consumption during lockdown did not go down, there was a supply and demand gap faced by solar thermal companies. The large-scale vaccination drive to deal with the situation is expected to impact the market positively. Moreover, reopening of the market and trading is likely to normalize the demand for these panels in the forthcoming future.
We, at Fortune Business Insights, have collated some of the major key drivers responsible for the adoption of solar thermal panels.
The rising amount of carbon footprint in the environment has become a concern for several countries that are rapidly adopting policies to curb carbon emissions. For example, Brazil has set a goal of 42.5% of its primary energy supply to be sourced from renewable energy sources by the end of 2023. Germany has also established a target of 65% utilization of renewable energy by the end of 2030.
Technological Advances to Spur Growth Opportunities
The market has experienced the introduction of virtual power plants and distributed energy generation systems in the last decade. This technology enables the integration of various power sources and provides operational advantages while being cost-efficient. The success of such technologies across North America and Europe has resulted in the technology gaining rapid footage in the Asia-pacific region. The market is expected to experience a high surge in demand for these thermal systems in the foreseeable future with the introduction of new technologies in the market.