Reducing energy costs for consumers, the cost of imported fuel, and greenhouse gas emissions, as well as increasing GDP and employment, are some of the benefits of solar water heaters. In addition, implementing incentives for their installation would multiply the benefits at no fiscal cost.

These conclusions are drawn from a study by IOBE on “Trends and prospects of the thermal solar systems (THS) manufacturing sector in Greece” presented on Friday at the general assembly of the Solar Energy Industries Association (SIE).

According to the data included in the study, THES contributes to energy saving and substitutes conventional energy sources, both directly and in electricity generation, much of which is from abroad, burdening the trade balance. In particular:

* The amounts of fuel saved annually are estimated to range from 4.9 to 6.1 million barrels of oil equivalent (boe).

* The improvement in the trade balance is estimated to be between Euro 299 and Euro 362 million. The cumulative benefit to the trade balance over 20 years from existing solar water heaters ranges from Euro 3.8 to Euro 4.7 billion.

* The total energy produced by RES in Greece in 2023 corresponds to avoided emissions of 2.1 to 2.8 million tonnes of CO2 per year. At the current price level of CO2 emission allowances (around 70Euro/tCO2), the total benefit is estimated between Euro148 million and Euro197 million.

* Assuming that the installed capacity of the CHPs was 4,018 MW in 2023 and the annual estimated thermal solar production reached 3,772 GWh, the electricity substituted corresponds to the production from wind power plants of about 1,730 MW, from photovoltaic plants of 2,900 MW, or thermal plants of about 430 MW.

From a total of about 430 MW of wind power, including about 430 MW of solar thermal power.
*These RES contribute substantially to the achievement of the national targets, as 1.9 of the 23.4 percentage points of RES share in total gross energy consumption was attributable to them in 2022.

The study considers three different scenarios for the evolution of the market: in the baseline scenario, systems installed replace those that are retired; in the incentive scenario, subsidies or equivalent tax incentives are foreseen; and in the enhanced incentive scenario, special programs such as the “Switch water heater” applied in 2023 are added. In both incentive scenarios, the assumption is made that each additional DHW is subsidized with 500 euros. Thus the total subsidies amount to 20 million per year in the Incentive Implementation Scenario and 42 million per year in the Enhanced Incentive Scenario. In both cases – according to IOBE – the net fiscal effect is positive by 0.4 and 0.8 million euros per year respectively, while a significant positive impact on GDP and employment is foreseen.

The study further examines scenarios of a VAT reduction to 6 % or its abolition, which – if passed on to final prices – would imply a price reduction of 14.5 % and 19.4 % respectively. In these cases, this would result in a reduction of public revenues by between 8.7 and 16.8 million euros per year and a more significant impact on GDP, employment, and energy savings.

According to the data reflected in the study:

The industry currently comprises about 30-35 manufacturing companies of various sizes. In 2023 about 62% of the total surface area of collectors manufactured in Greece was exported to other countries. Overall, the sales value of the sector was estimated in 2023 at Euro 344 million and the total contribution of the THES manufacturing, sales, and installation sector to GDP was Euro 351 million in 2023.
For every euro of production value in the THES sector, the country’s GDP increases by about one euro.

-In 2023, domestic sales of THES showed a strong increase and amounted to 461 thousand square meters (surface area of solar panels). The total surface area of solar panels in Greece in 2023 was 5.7 million sq.m.

-Compared to other European countries, the use of solar thermal systems in Greece is particularly well developed: Greece is the second country in Europe after Germany in terms of installed capacity of THES, while in terms of capacity per capita, it is only behind Cyprus.

Only Cyprus is second in terms of population size only to Cyprus.
-In 2021, HHPs were the main means of hot water production for 35% of households in Greece.

In comparison to Cyprus, HHPs are only second to Cyprus in terms of size.