SUCCESS STORIES & LESSONS LEARNT SOLAR WATER HEATING INDUSTRY IN

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SUCCESS STORIES & LESSONS LEARNT SOLAR WATER HEATING INDUSTRY IN
European Union Energy Facility II Project: Frameworks, Policies and Instruments for
                    Mobilising Renewable Energy in the Caribbean

 SUCCESS STORIES & LESSONS LEARNT
  SOLAR WATER HEATING INDUSTRY IN
            BARCELONA
OVERVIEW
Since the development and patent of the first commercial solar water heater (SWH)
over a century ago, they have become competitive with conventional methods of water
heating – such as electricity. Despite their development, however, with the exception of
Barbados, penetration of the technology in the Caribbean has been relatively low. So
was the case with Barcelona, Spain up to the summer of 2000.
Barcelona may stand as one of the best examples of achieving high SWH penetration
using a policy approach based on regulation rather than subsidies. The city increased
its SWH market penetration twenty-fold, from 1.1 m2/1000 inhabitants in the year
2000, to 20.7 m2/1000 inhabitants in 2005 (CTRAN 2010).

POLICIES
SOLAR THERMAL ORDINANCE
The Barcelona city council implemented the Solar Thermal Ordinance (STO) in August
2000, with a view to drastically increasing solar collector use for providing domestic
and tertiary hot water needs. The council set a goal for achieving 96,300 square
meters of solar collectors installed in the city by 2010 compared to its level of 1,650
square meters in 2000 (CCAP 2012). This would have given an estimated thermal
generation of 778GWh per year, equivalent to the output of a 100MW oil fired power
plant.

The STO is a purely regulatory policy, requiring no financial resources from the
government or citizens of Barcelona (CTRAN 2010). In its initial form, it mandated
building developers to include in their development plans, for new buildings or major
building renovations that had a minimum hot water demand of 2,000 litres/day, a
plan for at least 60% of that demand to be met through solar water heating. This
included buildings intended for residential, health-care, sports, commercial and
industrial use and, generally, buildings with any activity involving the existence of
dining rooms, kitchens, laundries or other circumstances that led to significant hot
water consumption (BEA 2006). For swimming pools, the ordinance required that
100% of energy be generated from solar-heated water. Exemptions were granted only
in cases where it could be proven, through a technical study, that a facility would be
unable to comply with the ordinance. By 2005, cumulative installed capacity reached
30,000 square meters of solar collector surface (WEC 2007). The following year,
Barcelona Energy Agency (BEA) revised the STO which saw the minimum demand
criterion of 2,000 litres/day hot water being removed. All buildings, new or being
renovated, regardless of size and/or purpose were now subject to the STO. However,
instead of requiring a static 60% to be met by SWH, building developers were now
obliged to cover 30% to 70% of their domestic hot water use with solar thermal energy,
European Union Energy Facility II Project: Frameworks, Policies and Instruments for
                    Mobilising Renewable Energy in the Caribbean
subject to consumption needs, available back-up fuel, and the climatic zone in which
the building is located (CCAP 2012). Additionally, the STO was included as a basic
requirement into the city’s building code, the “Código Técnico de la Edificación” (CTE),
which also came into effect in 2006 (CTRAN 2010).

As of December 2010, Barcelona had achieved a total installed solar thermal surface
area of 87,600 square meters.

                     Total Installed Solar Thermal Surface Area
                                 Source: (CCAP 2012)

INSTITUTIONAL FRAMEWORK
Barcelona’s STO involved participation and negotiation from several stakeholder
groups; including NGOs, energy efficiency and renewable energy groups/professionals,
architects, engineers, property agents, building installers and the built industry
investors. It was passed by the city council in 1999, but provided for an 18-month
moratorium, intended to allow all stakeholders time to make the necessary
adjustments, thus entering into force in August 2000. Due to a lack of technical
capacity on the city council’s part, implementation, management and enforcement of
the STO was transferred to the Barcelona Energy Agency (BEA) in 2002 (Schaefer
2006). The BEA is a local public consortium consisting of the city council, Spanish
Ministry of Industry, other ministerial and public bodies with regards for energy and
environment, and academia. Academia was included in the consortium to ensure the
introduction of innovative approaches, with respect to the solar technologies and
structure designs used to accomplish water heating, in the city’s benefitting structures
(Schaefer 2006).
The BEA implemented several measures to ensure that the STO had maximum
compliance. These measures included:
   1. Requiring the building design (inclusive of proof of STO conformity) to be
      submitted with the application for construction permit
European Union Energy Facility II Project: Frameworks, Policies and Instruments for
                     Mobilising Renewable Energy in the Caribbean
    2. Performing regular checks by building inspectors post-installation to ensure
       that the building or structure maintained its compliance with the ordinance.
    3. Issuing fines of up to 3 million euros for non-compliant buildings (WEC 2007).

THE CHALLENGES
The BEA’s implementation and management of the STO during the first five years
revealed some weak points and challenges to be addressed. This led to several
revisions of the STO.
                 Issue                                          Measure
 Concern that building developers,        A standard certification of solar systems and
  in an effort to ensure compliance        installation was developed in order to prevent
  with the STO, would install sub-         the installation of low quality equipment as a
  standard or low quality SWH              result of the STO (WEC 2007)
  units.
 Fear by architects and building          The extra cost for solar thermal installations
  developers that building prices          was relatively modest, around 0.5 to 1 percent
  would increase as a result of the        of total building costs. An interest free credit
  STO.                                     covering 70% of this investment was arranged
                                           for property developers from an arm of the
                                           Ministry of Energy1 in conjunction with the
                                           Public Credit Institute and the Instituto de
                                           Crédito Oficial (CCAP 2012, CTRAN 2010).
 Lack of information and                  Stakeholder roles were clarified through a
  experience at the outset, and no         period of discussion and implementation of a
  clear definition and demarcation         pilot project.
  of the responsibility of each party
  (architects, building promoters
  and users).
 Insufficient qualified installation      The Barcelona Energy Agency worked with the
  contractors to meet the demand           federations of builders to introduce and run
  for their services.                      specific training courses in solar energy to
                                           build capacity.
 At first, maintenance of the solar       When the STO was revised in 2006, it
  thermal installations was not            contained new obligations to have a quality
  guaranteed, introducing                  certification for solar thermal installations, as
  investment risk.                         well as a maintenance contract. (CCAP 2012)

1The Institute for Diversification and Saving of Energy (IDEA) which falls under the Ministry of
Energy (IDEA 2012).
European Union Energy Facility II Project: Frameworks, Policies and Instruments for
                    Mobilising Renewable Energy in the Caribbean

REPLICABILITY
The Barcelona SWH case presents a good example of the creation of an enabling
framework allowing competitive renewable energy solutions to break into the market.
SWH technology is economically competitive for domestic and tertiary hot water
supply in the Caribbean; it has a higher cost compared to fossil fuel alternatives but
has zero fuel or electricity costs, and this largely compensates for the additional
capital expense – the cost of imported fuel to the Caribbean is the most significant
contribution to the high energy costs of the region. However, building developers, who
inevitably look to sell or lease units in the building are interested in building (and
selling/leasing) at the lowest investment, which generally means favouring the cheaper
upfront investment option of fossil-fuel based water heating, leaving their tenants or
future building owners and occupants to bear the much higher day-to-day energy
consumption costs associated with the fossil fuel choice. This situation typically
results in lower costs to the developer, but globally, when considering costs to both
developer and the prospective owner/renter, an overall higher cost for the provision of
hot water. This situation can only be overcome by inciting behavioural change on the
part of the developer, using regulation.
   •   A regulatory policy that mandates the inclusion of solar water heaters in
       building plans, whether new or for renovation.
   •   An entity with a specific mandate to implement the policy and with the requisite
       technical capacity and resources to implement, manage and enforce such a
       policy.
   •   Inclusion of academia in the implementation and management of the policy, to
       promote continual improvements and innovation of applied SWH technologies
       and designs through research and development.
   •   Integration of said policy into national building code for easier enforcement.
   •   Established quality standards, for equipment, installation and maintenance; to
       ensure that quality is not compromised in order to meet the requirements of the
       policy.
   •   A routine follow up and maintenance program (use of building inspectors) to
       ensure continued compliance with the policy and respect of established quality
       standards.
   •   Low interest financing options to facilitate the additional costs of SWH
       compared to electric water heating.
   •   Capacity building for technocrats, building inspectors, installers and other
       stakeholder groups involved in the technical implementation of the policy.
   •   Well-designed fines that will encourage compliance to the policy requirements.
European Union Energy Facility II Project: Frameworks, Policies and Instruments for
                    Mobilising Renewable Energy in the Caribbean

REFERENCES
BEA (BARCELONA ENERGY AGENCY), 2006-last update, Barcelona Solar Thermal
Ordinance. Available: http://www.barcelonaenergia.cat/eng/operations/ost.htm [12/05, 2014].

CCAP (CENTER FOR CLEAN AIR POLICY), 2012-last update, The Solar Thermal Ordinance
for Efficient Water Heating in Barcelona. Available: http://ccap.org/assets/CCAP-
Booklet_Spain.pdf [09/05, 2013].

CTRAN CONSULTING PVT, 2010. Building Sector Policies and Regulation for Promotion of
Solar Water Heating System. India: CTRAN.

IDEA (THE INSTITUTE FOR DIVERSIFICATION AND SAVING OF ENERGY), 2012-last
update, About us. Available:
http://www.idae.es/index.php/idpag.11/relcategoria.101/relmenu.30/lang.uk/mod.pags/mem.detal
le [10/05, 2014].

SCHAEFER, B., 2006-last update, Barcelona Solar Ordinance. Available: http://www.esteem-
tool.eu/fileadmin/esteem-tool/docs/CASE_16_def.pdf [09/05, 2014].

WEC (WORLD ENERGY COUNCIL), 2007-last update, Policy measures to support solar water
heating: information, incentives and regulations. Available:
http://www.worldenergy.org/documents/solar_synthesis.pdf [09/05, 2014].
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