Chinese take to solar-powered water heaters
Domestic company finds niche that's low cost and has pay back
By Emma Graham-Harrison
Updated: 11:03 a.m. PT June 5, 2006
DEZHOU, China - Dusty Dezhou was relegated to the footnotes of Chinese history for centuries, known mainly as the place where a Filipino king died.
Now, Huang Ming hopes hot water will help put it on the map.
His company has earned a fortune manufacturing solar heaters, relatively low-tech rooftop devices which capture the sun’s energy to provide water for baths and washing and are at the forefront of a renewable energy drive.
At least 30 million Chinese households now have one and last year the country accounted for around 80 percent of the world market, said Eric Martinot, visiting scholar at Beijing’s Tsinghua University. “We are at 15 to 20 percent annual growth and I don’t see that slowing down.”
Huang says his Dezhou-based firm, China Himin Solar Energy Group, is the largest in a fragmented and almost entirely Chinese market, with a share of around 14 percent.
And Dezhou's mayor is using his heating success as the basis for a a bid to follow British University town Oxford and Australia’s Adelaide as host of an international solar congress.
Cheap and effective enough to make economic sense to middle-class urbanites, Huang’s basic models start at around $190, although for a luxury home this could rise to $2,250.
With technology so efficient they can work at temperatures well below freezing and under cloudy or smog-choked skies, they soon pay for themselves, he says.
“Even in winter when the temperature is minus 20, and with this kind of pollution, they can produce hot water,” Huang says, gesturing to the city’s gray skies.
Demand from house-buyers is forcing many builders to include the heaters in new developments, and a government pledge that all buildings in major cities will be revamped to make them more energy efficient by 2020 should mean further customers.
Wind power generation, or more familiar solar panels used to generate electricity, are expensive and usually need government subsidies to take off. The heaters have spread far faster.
Tubes under the tank
All have the same basic design, a row of sunlight-capturing glass pipes angled below an insulated water tank.
The key to the demand boom, even in the freezing northeast and chilly western deserts, is the vacuum separating the inner tube with its energy-trapping coating from an outer tube.
Sunlight travels freely through the glass tubes but the heat it generates is trapped inside the central one where it can be transmitted to water.
“The vacuum prevents molecules carrying heat away, as there is no direct contact between inner and outer tube,” Huang said.
The heaters are also easier to produce than better known electricity-generating panels. Himin’s workers making these wear white overalls and hair caps, in rooms sealed to visitors. But downstairs, water-heaters roll off a production line in open warehouses filled with the clanging of giant metal presses, the roar of painting machines and open flame of glass-handlers.
The relatively low-tech factory floor helps keep costs down to around $120 to $150 per square meter, well below the $700 to $800 charged for similar heaters in Europe.
The simplicity of the model has also encouraged a lot of small start-ups -- some, though, of dubious quality.
“It’s a very fragmented industry, although they employ about 250,000 people, which is about an eighth of the total in all of China’s renewable energy industry,” said Martinot.
“We might start to see centralization into a few bigger players,” he added, with stronger firms helping build up exports, which are currently negligible.
Owner shifts from oil to solar
Himin will almost certainly be one of the new powerhouses. Huang says revenues will expand 80 to 100 percent this year, although he declined to give figures in yuan.
The trim 48-year-old, who is so committed to efficiency that an office rule bans workers from using the elevator to travel less than three floors, is also considering a listing on the Hong Kong stock market.
As a delegate to China’s parliament, he helped draft a new renewable energy law that found favor in Beijing as official worries grow about reliance on imported oil and polluting coal.
Huang started on the other side of the energy industry, training as a petroleum engineer. But he took worries about “peak oil” -- the time when global production will peak, followed by a decline -- seriously enough to nurture a second career.
“One of my professors told me that petroleum resources would only be valid for 50 years, so I thought maybe this is a sunset field,” he said with a grin.
He got a job at a petroleum institute in Dezhou, but poured all his spare time and cash into researching solar technology, even after selling a patent for oilfield equipment.
He worked as designer, engineer, porter, plumber and salesman, and to the concern of his ever-poorer wife, gave his first heaters away as gifts to family and colleagues.
The first big break came when a factory manager at a family wedding ordered heaters for all his workers, forcing Huang to build the factory he’s been using ever since.
Copyright 2006 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters.
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