Firm's plan for water heats up

Solar water heaters, such as these in India, are coming to Musaffah.

In a country renowned for its hot sun, the simple solar water heater is as rare as it is practical. Millennium Energy Industries, a Jordanian firm, hopes to change that, starting with a new contract to supply solar hot water systems to 25,000 residents of Musaffah. With the cost of the technology the same as conventional water-heating systems, the company sees a strong market for solar hot water in new developments across the country, said Ennis Rimawi, the chairman of Millennium.

A solar heater warms water by collecting the heat of the sun, usually with a black glass panel or other absorbent material, and then storing the water in an insulated tank. Although the technology is well developed and among the least costly renewable energy technology options, experts say the Government will need to create financial incentives to allow solar hot water to catch on in the UAE, where electricity prices are heavily subsidised.

Ideal conditions in the Gulf meant solar hot water could compete directly with conventional water heaters on an energy cost basis, Mr Rimawi said. "We really call it the low-hanging fruit in the solar energy sector, because it's not sexy, and it's relatively mature," he said. "The products themselves in other places have been around for a while." Millennium was selected last month by Al Rayan Investment Company to design and install solar hot water systems for a housing development for 25,000 labourers in Musaffah, called Modern Residential City. The company would begin installing the systems in the third quarter of this year, Mr Rimawi said.

He estimated that Al Rayan had saved about US$8 million (Dh29.3m) by choosing solar hot water systems, mainly because there were no electricity fees. Millennium would continue to focus on contracts to install systems in new developments in the UAE, he said, because subsidised electricity prices reduced the incentive for property owners to swap from their old systems. By contrast, in Jordan and Palestine, the firm's other core markets, property owners were switching from conventional systems to solar hot water to avoid rising electricity costs, he said.

Widespread implementation of solar hot water systems could reduce energy consumption by several per cent in the UAE, said Michael Liebreich, the chief executive of New Energy Finance, a renewable-energy research firm. But Reg Eayrs, the director of environment at Hyder Consulting, has compared the costs of solar hot water with conventional systems and said solar did not add up, in part because energy prices were so low.

"We still haven't found the solar systems stacking up," he said. "It is difficult to fully replace the typical infrastructure with a stand-alone system. In high-rise developments, architects are reluctant to sacrifice rooftop space for the water heater system, and the limited space means conventional systems cannot be fully replaced with solar systems." Although solar hot water made more sense for villa owners with lots of rooftop space, a strong market would not develop without government involvement, either through rebates or some other scheme to make solar systems cheaper, Mr Eayrs said. In other countries, "the uptake really took off when there were rebates offered".

Solitaire Solar, which markets hot-water heaters in the UAE, is targeting the villa market and is going ahead with plans to build an assembly plant within the country this year, said Felicia Simion, the firm's area manager. Mr Rimawi remains confident that a market will eventually develop, especially with the growth of Masdar, the government-backed energy investment firm, and new green building guidelines emerging in Abu Dhabi and Dubai.

"The region artificially made it unviable with an energy subsidy," he said of solar hot water. "What Masdar has done, and the Abu Dhabi Government, in growing the awareness of sustainability has created a level of heightened awareness and interest." [e-mail]