Global Solar Water Heating Market Transformation and Strengthening Initiative

1. Global Solar Water Heating Market Transformation and Strengthening Initiative Santiago, Chile 22-23 June 2011

2. UNDP’s work on Energy, Infrastructure, Transport & Technology UNDP is engaging with many modalities of promotion of energy access UNDP’s approach • Low-emission, climate-resilient development • Basis and anchor of the strategy • Starting point for improving energy for development, with focus on the poor • Achieving market transformation to catalyze finance • Creating enabling policy & regulatory frameworks • Using barrier removal approach • Innovative public-private partnerships • To reduce investment risks, optimize the use of both sources of finance, and pool public and private sector talents and strategic capabilities • Rapid scale-up of energy access NairobiFramework

3. We are on the ground in 135 Country Offices worldwide

4. Our energy portfolio: 200 large projects, 2,500 small projects 1 2 • 1.1 Access to electricity (on- and off-grid): • $260 m + $900m in co-financing Promoting universal access to modern energy for the poor Enhancing quality, affordability and security of energy • 2.1 Energy efficiency and conservation: • $265m + $1.2bn in co-financing • 1.2 Access to clean fuel for heating and cooking: • $100 m + $300m in co-financing • 2.2 Sustainable urban and transport systems: • $85 m + $ 820 m co-fin • 1.3 Access to mechanical power: • $50 m + $50m in co-financing $350m +$2bn in co-finance $410m + $1.25bn in co-finance

5. 1 Promoting access to clean fuels for heating & cooking • $30 million project portfolio • 20 projects in 20 countries • E.g. Many projects in ECIS: Armenia, Kazakhstan, Ukraine, Romania, Slovenia, Belarus, Uzbekistan, etc. • $50 million project portfolio • 21 + >200 small projects in 21+ countries • E.g. Solar Water Heaters in South Africa; in Lebanon, in Mexico, in Chile, in India, in Albania, Morocco and others • $20 million project portfolio • More than 500 projects in 50+ countries • E.g. UNDP-GEF Small Grants Programme fuel-efficient cookstoves project, Nepal; EE cookstoves in Kenya District Heating Solar Water Heating Clean Fuel & Stoves for Cooking & Heating Value of clean energy for heating & cooking portfolio (1992-2010): $100 m + $ 300m in co-financing

6. Contents • Overview of Global Solar Water Heating Project • National Projects’ Implementation • Preparation for Phase II • Introduction of GEF project development

7. Overview of Global Solar Water Heating Project • Initiated in the end of 2005 with an objective to accelerate the commercialization and sustainable market transformation of solar water heating in the GEF programme countries • Final GEF approval in August 2008 with total funding of $36 Million including both GEF and confirmed cofinancing • Individual country programs implemented under the UNDP national execution modality and supported by the global knowledge management component managed and cofinanced by UNEP in co-operation with ICA • Countries envisaged to participate the first phase: Albania, Algeria, Chile, India, Lebanon and Mexico

8. Project Framework

9. Overview of Global Solar Water Heating Project Target of global project (Phase I): The target of the first phase is the installation of additional 3 million square meters of SWH panels (as compared to expected baseline development) and sustainable growth of these markets at the minimum annual rate of 20% (in total installed capacity) by the completion of the project.

10. Albania – National Project Implementation • Barriers (at the project beginning) Lack of supportive institutional, legal and regulatory framework; lack of awareness and capacity of the targeted end-users and building professionals; lack of attractive financing mechanisms and new business models; lack of certification and quality control; etc. • Major progress of the national project (up-to-date) • Consultations, analysis and elaboration of initiated legal and regulatory measures to promote the solar thermal applications done by the Project at both national and municipal level; • The Project has assisted METE- ministry of Economy, Trade and Energy with the draft Solar Energy chapter of the primary legislation and is on the way to provide the relevant texts under the secondary legislation of RES and EE Law. • Project has followed the consultations with the related Institutions for the legal and regulatory changes that could be introduced into the building regulations to promote increasing utilisation of SWH, including specific solar obligations.

11. Albania – National Project Implementation (Continued) 4. Several meetings with the National Agency for Natural Resources already taken, as the most probable Institution to host the solar website; 5. The Project has already suggested the proposals for changes by the SWH curricula of the training courses of the Vocational Training Centers in Albania. Consultations and visits are paid to different VTC-s to better elaborate the needs of those centers in improving their trainings for SWH courses; • Meetings with "ProCredit Bank", "Credins Bank", and “Tirana Bank" are organized regarding the creation of opportunities for collaboration on the credit of solar panels for hot water, participation in joint awareness campaigns and the need /possibility of supporting Albanian clients interested in solar panels for hot water through a guarantee fund; Meetings with EBRD, IFC and USAID are organized to discuss possibilities of cooperation in the field of solar panels for hot water to establish a financial support mechanism; • The manufacturers have already sent the sample collector by SPF Testing Centre in Raperswill, Switzerland for pretesting. The Project has already done all the institutional arrangements and a very important study tour/Testing Training of the local manufacturers is organised in SPF during 30 May-10 June, 2011, to prepare the local manufacturers for the Keysolar certification, probably by next year.

12. Chile – National Project Implementation • Barriers (at the project beginning) Inadequate quality control and inspection of SWH equipment; Inadequate technical qualification in big projects: Hospitals, schools, etc.; Lack of knowledge on the technology and its benefits; Mistrust through bad experiences; High initial SWH cost and long payback time for the recovery of the investment; Lack of certification of the equipment and minimum standards etc. • Major progress of the national project (up-to-date) • Norms and regulation/certification: In 2009, a new law (law 20.365) was established providing a tax exemption to builders who install SWH in new construction. The project has been supporting the implementation of law 20.365 via training seminars for government entities involved in the exemption process and awareness seminars for the private sector. In 2010, 6 companies have applied for the tax exemption. Modifications to the law are being proposed regarding (i) beneficiaries, (ii) certification, (iii) tranches and limits, (iv) quality assurance. Additionally, efforts are being made to make the use of SWH mandatory in Chile.

13. Chile – National Project Implementation (Continued) • Awareness/Dissemination: www.programasolar.cl; • Financing: Information booklets and seminars on how to access the tax exemption have been organized; New financing lines will be explored for existing households and final users (law 20.365 benefits construction companies). • Technical capacity development for project developers and technicians: Training program being developed

14. India – National Project Implementation • Barriers (at the project beginning) Non-uniform policies and regulations and weak implementation of mandatory orders; Uneven penetration across states and demand segments; Inadequate awareness about product, benefits, policies, financing, etc.; Weak, fragmented and localized supply chain and poor post-installation services; Quality assurance system not fully in place; Unavailability of financing for various market segments; Issues of retrofitting existing buildings as well as new multi-storied buildings,etc. • Major progress of the national project (up-to-date) • The enabling policy framework has been strengthened through the alignment of the project’s objective with India's National Solar Programme, 11th Plan targets (2007-2012). • A study undertaken under the project has come up with a draft Solar Water Heating Order, 2010, which aims to bring about policy and institutional convergence for the mainstreaming of SWH into the building sector.

15. India – National Project Implementation (Continued) • Guidelines are being developed under the project, such as: Guidelines for the design and installation of SWH systems in multi-storey buildings; a Draft Users' Handbook for SWH Systems and a “SWH Calculator”, a user-friendly tool to assess individual SWH capacity installation, which has been uploaded on the Ministry’s website. • A quality assurance system comprising standards, certification, and labeling is also being developed. A Technical Committee is being set up to establish Minimum Efficiency Performance Standards. A suitable mechanism is also being developed under the project for the rating of companies with a "Trust Mark" on the basis of their production facilities and quality of installation and repair services.

16. Lebanon – National Project Implementation • Barriers (at the project beginning) Lack of analysis on existing building codes; Lack of motivation to use solar water heaters; Lack of quality control and certification, product standards (Solar Keymark); Lack of labeling scheme to inform the end-users about the specific characteristics of products; Lack of awareness raising of architects, consultants to include green components in new buildings (even without building codes); Lack of financial and fiscal incentives; Lack of training and recognition of SWH installers, etc.; • Major progress of the national project (up-to-date) • Installation of the SWH Testing Facility at the Industrial Research Institute (IRI) facility in the Lebanese University campus in Hadath, Beirut, Lebanon. The testing facility is part of a grant from the Government of Greece to Lebanon which was mobilized by the project and is coordinated with the Greek counterpart CRES; • Adoption of the mandatory energy efficiency standards for SWH according to the Lebanese Norms (equivalent to the international EN standards) following the decision of the Council of Ministers on 21 September 2010;

17. Lebanon – National Project Implementation (Continued) • Training workshop for more than 80 representatives of SWH suppliers/ installers on the use and benefits of the installed SWH Testing Facility at the Industrial Research Institute (IRI); • Completion of more than 25 awareness raising sessions all over Lebanon in universities and in cooperation with the Ministry of Education and Higher Education (MEHE); • Technical support to the national financing mechanism of SWH issued by the Ministry of Energy and Water and the Central Bank of Lebanon; • Continuous update of the project web site; Continuous update of the national database on SWH suppliers/installers; Preparation, publication, and distribution of 2,000 copies of a brochure on the project, etc.

18. Mexico – National Project Implementation • Barriers (at the project beginning) Lack of a widespread certification system for SWH (efforts are underway by the PROCALSOL to introduce a certified trademark); Lack of a product standard dealing with SWH, stand-alone and back-up systems; Inefficient installation and verification systems; Lack of a widespread base of SWH professionals; Insufficient training courses and facilities; Lack of knowledge throughout the population; High initial SWH system costs; Fragmented emerging supply market, etc. • Major progress of the national project (up-to-date) • Initiated Promotion Strategy Development focused in the Tourism (hotels) Sector; • Drafted best practices manual for vertical housing; • Drafted fiscal incentives Manual ; • Initiated development of financial mechanisms for the tourism (hotels) sector (2nd half 2011);

19. Mexico – National Project Implementation (Continued) 5. Conducted workshops and disseminated implementation guide to improve local governments building codes incentive; • Prepared for monitoring mechanism for SHW market Development (suppliers and manufacturers); • Initiated update voluntary standards for SWH, (2 year’s plan) starting from June 2011; • Low household income housing including SWH has developed with 36,973 credits in 2009 and with a 500,000 credits planned for 2011.

20. Preparation of Phase II Target of global project (Phase II): By extrapolating the results for 10 additional countries envisaged to participate the second phase of the global initiative (including a mix of smaller and bigger countries), a realistic target has been estimated as an additional 4 million square meters of SWH panels (including both the phase 1 and phase 2 countries) compared to the expected baseline development. With sustainable growth of these markets at an annual rate of 20% after the project completion, a longer term impact would correspond to an additional 100-150 million m2 by 2025 with the corresponding reduction of CO2 emissions by over 20 million tons of CO2 per year.

21. GEF Project Development

22. GEF Project Development

23. End Judy LiResearch SpecialistEnergy, Infrastructure, Transport & Technology Group judy.li@undp.org