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Innovative Financing for Solar Water Heating

Solar thermal for hot water for domestic and industrial use

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Solar thermal technology can be used to provide hot water for domestic or industrial uses. Recently, ‘combi’ systems have been introduced which can provide both space and water heating. Advances in the technology have provided so-called solar assisted air conditioning. The systems can be tailored to different needs and circumstances, such as industrial applications and domestic use.

Clean Development Mechanism market status: 

[this information is kindly provided by the UNEP Risoe Centre Carbon Markets Group]

Project developers of solar thermal energy projects in the CDM pipeline mainly apply the following methodologies:

ACM2 “Consolidated baseline methodology for grid-connected electricity generation from renewable sources”
AMS- I.C. “Thermal energy production with or without electricity”
Further information on these metholodogies can be found here.

As of 1 February 2010, there are 10 solar thermal projects in the CDM pipeline - 5 are registered and 5 are at the validation stage. [media:image:3]

Example CDM project:
Title: Federal Intertrade Pengyang Solar Cooker Project (CDM Ref. No. 2307)
The Federal Intertrade Pengyang Solar Cooker Project is located on the dry land of southern Ningxia in northwestern China. Implemented by Ningxia Federal Intertrade Co., the proposed project will install 17,000 solar cookers for the poor rural residents in mountainous areas with a rural population of 92,331 (or 20,341 households). The project will cover 83.6% of the households in the project region. The rating power of each solar cooker is 773.5 W and the total capacity of the proposed project is 13.1 MW. The proposed project will enable the rural residents to efficiently substitute solar energy for the fossil fuel (coal) used in daily cooking and water boiling - avoiding CO2 emission that would be generated by fossil fuel consumption.
Project investment: USD 900,000 million
Project CO2 reduction over a crediting period of 10 years: 357,230 tCO2e
Expected CER revenue (USD 10/CER): USD 3,572,300

To build knowledge about, and advance models for, innovative financial mechanisms to boost solar water heating.

Location

15° 46' 46.92" S, 47° 55' 46.92" W
Main activity and output: 
  • Develop a model business plan for Brazilian SWH fee-for-service and performance contract operations;
  • Develop a model business plan for Caribbean SWH fee-for-service operations;
  • Explore and integrate a carbon finance role in these business models;
  • Work with the Brazilian and Caribbean stakeholders to help evaluate viability and adapt business plans for their situation;
  • Build knowledge about possibilities for carbon finance in Caribbean utility SWH programmes;
  • Explore possibilities for international REC trading to boost developing country SWH activities;
  • Share information with a network of stakeholders, including other REEEP priority countries such as China, India and South Africa.
Expected impact: 
  • Provision of model business plans to solar water heating manufacturers and electric utility companies in order to develop and launch new operations;
  • Increased understanding of replicable innovative financing models such as fee-for-service and performance contract arrangements, as well as the tools needed to design and implement such programmes.