Solar heating technology
Solar heating technology
Business Model Description
Install solar heating and cooling systems in residential, public, industrial and commercial rooftops.
Expected Impact
Improve the issue of energy security and reduce electricity prices through solar cooling and heating systems that provide clean energy
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Jordan: Countrywide
Sector Classification
Renewable Resources and Alternative Energy
Policy priority
Jordan’s energy strategy 2020-2030 stresses the need to meet the expected increase in energy demand driven by industrialization, population growth, economic growth, and refugees (5). This strategy aims to boost the contribution of renewable energy to reach 14% by 2030 up from 11% in 2020 (6).
Investment opportunities introduction
With about 39% energy consumption increase between 2010-2018 and projected 17% energy demand growth in 2030, Jordxan faces high risk due to limited grid capacity (4). Jordan imports 93% of its fossil fuel, mainly for power generation and transportation (3).
Solar Technology and Project Developers
Pipeline Opportunity
Solar heating technology
Install solar heating and cooling systems in residential, public, industrial and commercial rooftops.
Business Case
Market Size and Environment
More than 60% of energy consumed by households is for space heating and cooling (11).
Over 48% of households own air conditions consuming 3382.5 GWH of electricity annually (13).
There are around 112 hospitals, 1623 primary healthcare centers (12), and 7434 schools (13).
Indicative Return
10% - 15%
IRR ranges between 13% - 15% and net profit-sharing equal to 10% observed for similar projects (11).
Investment Timeframe
Short Term (0–5 years)
On average, the payback period for this type of project ranges between 2.5 and 5 years (15).
Market Risks & Scale Obstacles
Operations
Technology Adoption
Impact Case
Sustainable Development Need
Overall energy consumption has been steadily increasing in recent years. Around 14% of households use solar energy to heat water (8) . More than 60% of the energy consumed in households is used for space heating and cooling (9) .
Jordan’s climate is characterized by long, hot and dry summers with cold winters. Climate change is expected to exacerbate extreme temperature changes. As a result, heating and cooling needs are rising mainly due to improved living standards and rising global temperatures (10).
Expected Development Outcome
Enhanced energy security through reduced reliance on imported fossil fuels.
Reduced CO2 emissions.
Reduced cost of energy and associated savings for households and businesses.
Gender & Marginalisation
Primary SDGs addressed
7.2.1 Renewable energy share in the total final energy consumption
7.1.2 Proportion of population with primary reliance on clean fuels and technology
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Indirectly impacted stakeholders
Corporates
Outcome Risks
Disposal of old equipment (lack of recycling facilities)
Reduction in government revenue which is focused on taxing traditional energy consumption
Impact Classification
What
The outcome is likely to be positive, important and intended because solar cooling and heating provides clean energy
Risk
Technical risks related to skills gap in maintenance, diversity of the heating and cooling systems increase complexity and risk of faults at the time of installation.
Impact Thesis
Improve the issue of energy security and reduce electricity prices through solar cooling and heating systems that provide clean energy
Enabling Environment
Policy Environment
Renewable energy is a policy priority for the country and is embedded in most energy strategies and policies.
The government has established various policies and regulatory frameworks to support renewable energy generation, including the renewable energy and energy efficiency law and various strategies (18).
Financial Environment
Fiscal incentives: Tax exemptions for renewable energy systems and equipment from customs duties and sales tax by Renewable Energy and Energy Efficiency law of 2012.
Other incentives: Award of long-term power purchasing agreement to grid-connected renewable energy projects. Permission to produce and sell electricity to the grid from renewable energy sources
Regulatory Environment
The energy strategy 2020-2030.
The Renewable Energy and Energy Efficiency Law (REEEL) of 2012 (19).
Marketplace Participants
Private Sector
There are many companies operating in the space with significant experience both in the country and the region.
Government
Ministry of Energy and Mineral Resource
Multilaterals
Donors and ODA are active in this area, such as ERBD
Public-Private Partnership
Large-scale project systems utilizing solar PV to generate power for heating and cooling (swimming pool, hotels, banks and universities).
Target Locations
