The solar thermal market of the United States : opportunities and risks for a possible market entry of a leading German market player

Abstract

This study provides a market entry scenario for a leading German flat plate collector manufacturer and system integrator for Solar Thermal power into the solar heating market of the United States. It contains an examination of the current domestic US market and shows market contrasts between Germany and the United States. Further, the study investigates existing companies relevant to the solar business in the US; it examines market potentials in consideration to the geographic and historical constellation of the US. The primary objective is to draw a roadmap for a market entry strategy for a leading German, midsize company into the US market. Energy from the sun is free; converting it into useful energy service constitutes a rather moderate investment for owners of private or commercial buildings. Renewable energy allows for a shift from centralized to decentralized energy production and supply in modern societies. In the past 20 years, photovoltaic (PV) and solar thermal systems (ST) harvesting the power of the sun have grown into market acceptation across Europe. Not only a shift in ideological awareness has help to develop a sustainable energy industry. Providing security for private and commercial investors under current legislation by introducing an easily applicable subsidy structure for the generation of renewable energy. The EEG (Erneuerbare Energien Gesetz) in Germany provides the necessary political and technical framework to support the development of a solar industry. This bill has been by far the driving factor for the rapid growth of the solar industry. As a consequence over the passed decade, German solar companies have gained technology and market expertise in a yet pioneering solar market. The ST market, however, has only developed in a few European countries with an established subsidies structure. Even though the European ST market has experienced many up-and-down cycles, market experts forecast a constant but moderate growth of 20% p.a. Despite the ongoing success, the industry is changing into a competitive playing ground. New product developments are reaching market inception and many companies are looking for an expansion into new, untapped markets. A possible market is North America; especially the United States with yet an undeveloped national structure for a solar industry and a legislation supporting an incentive structure to fuel investments into this market. There is nothing united to the US when it comes to energy policy. With the change in legislation and a shift of the abandoned use of natural resources, America could develop into a market several times the size of Europe.<br />