VIEWS: 90 PAGES: 7 CATEGORY: Sales & Marketing POSTED ON: 11/3/2010
The article presents a quick reference guide, with estimates of market sizes, prices, and key success factors, that can help would-be investors in renewable energy (e.g. solar water heater) strategize on a winning business model.
SOLAR WATER HEATING SYSTEMS By: Ronald Manalastas, MBA Solar Water Heater Business Indicator 2 SOLAR WATER HEATING SYSTEMS By: Ronald Manalastas, MBA A. PRODUCT PROFILE 1. Product Type Solar Water Heating Systems 2. System Description Solar Power System refers to the conversion of sunlight to produce electricity or heat (fluid or air). Using solar power to produce electricity is not the same as using solar to produce heat. Photovoltaic (PV) principles are used to produce electricity. Solar thermal principles are applied to produce hot fluids or air. Solar hot water refers to water heated by solar energy. Solar heating systems are generally composed of solar thermal collectors, a fluid system to move the heat from the collector to its point of usage, and a reservoir or tank for heat storage and subsequent use. The systems may be used to hear water for home or business use, for swimming pools, under-floor heating, or as an energy input for space heating and cooling and industrial applications. Solar hot water systems can be classified in different ways: Type of collector used Location of the collector --- roof-mount, ground-mount, wall-amount Location of the storage tank in relation to the collector Requirement for a pump --- active vs. passive Method of heat transfer --- open-loop or closed-lop (via heat exchanger) 3. Solar Water Heating Advantages Federal and state incentives / rebates / tax credits Utility rebates/net metering credits (sells unused solar power to utility firm) 30% reduction in actual electricity bill Environmental quality-compliant / go-green responsive B. MARKETS: Solar Water Heaters 1. Market Segment The major market segments of solar water heating systems, referring to applications, are as follows: Residential properties Small business structures Home builder businesses Large institutional facilities Solar Water Heater Business Indicator 3 For the purpose of this study, residential, small business, and home builder market segment will be the key target markets, with California and Hawaii as the prospective priority areas of operation. 2. Current Market Prices Local prices of solar water heater vary, depending on the system configuration as determined by the estimated power requirement of a particular household or small business. At current market prices, a solar water heater for typical household use can sell from $ 6,000 - $ 8,000 per unit. 3. Market Size Solar Water Heating System: California and Hawaii Estimated Market Size State Residential1 Business Sector2 Total Market3 California 7.40 M 4.3 M 11.7 M Hawaii 0.24 M4 0.1 M 0.3 M Total 7.64 M 4.4 M 12.0 M According to the Environmental and Energy Study Institute (EESI), there are 1.5 million solar water heaters already in use in U.S. homes and businesses. 4. Market Value The global solar power energy is an $11 Billion industry. The total US market for solar water heating systems could be around 38% or $4.2 Billion. The California market corners about 18% of total US market, while Hawaii shares less than 1%. Solar Heating System: California and Hawaii Estimated Market Value Estimated Market Value (US$ Million) Low Price Medium Price High Price State
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