Green light for solar hot water

Jim Sebastian.
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Dubai’s new ‘green’ building regulations are expected to mandate that solar water heating systems must also be installed to provide 75% of domestic hot water requirements. This will herald major opportunities for the MEP sector. We speak to a local leader in the field, Ecoval Trading LLC MD Jim Sebastian.

The potential of the solar water heating market in the UAE is indicated by the fact that Ecoval is now the number one global distributor for Solahart of Australia. “Italy is number two and South Africa number three.” Sebastian is convinced that Dubai’s green building code will play a major role in the exponential growth of this sector. “It will definitely have a big impact, and is already stimulating the demand for renewables.”

However, a major hurdle for the renewable sector at present is unsustainably low energy prices.

“Energy prices are so cheap there is no real incentive for people to save electricity and water, let alone spend extra money on renewable systems.” Having said that, while the sector only comprised as few as six companies two years ago, “now we count up to 30,” says Sebastian.

“The surprising thing is that most of these companies are new entrants. The major established building services players locally have not really entered the UAE solar sector, probably because they are in a comfort zone. Some local players have made inroads, but they are not in the big leagues.” Sebastian predicts the market will reach a saturation level, at which point consolidation will take place. Thus it is important for the market fundamentals to be in place right from the outset, says Sebastian.

The company was established in Dubai in 2002. “We started off with heat pumps for swimming pools, with the solar water heater business slow to catch on until 2007 with Sheikh Mahommed’s green building decree. That helped us a lot.” In terms of heat pumps, Ecoval was among the top two in the industry, with a locally-manufactured unit. “We foresaw that at some point competition would definitely come in, especially from China.”

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FEATURED COMMENT I would appreciate if cost comparison both capital and operating justifies hot water through solar instead with steam fo   1 Comments Read more comments »

However, Sebastian says the company did not anticipate the extent of the competition, which resulted in the virtual demise of the local manufacturing base for heat pumps. “There used to be up to four local manufacturers, but now it is just so much cheaper to import from China, and the quality is comparable.” It is for this reason Sebastian is urging the solar water heating sector to consolidate itself in the face of the relentless competitive pressure from such juggernauts as China. “So we left that industry and got into other avenues of business like ICI steam and hot water boilers, Alfal Laval heat exchangers and Sanyo PV systems.”

The secret to any company’s success, says Sebastian, is differentiating itself from the herd. “You have to make yourself stand out from the competition, and let the market not only know what you do, but how you do it differently.” This also means one has to be open to new ideas and trends. “When I was with my previous company, I was introduced to the Solahart product, with a consultant friend telling me the future lies in solar energy.” Sebastian says his initial research made him aware of “a lot of negativity about solar and misunderstanding of the market potential.”

At that stage Solahart did have representation in the Middle East, but it was looking for a way to break out even further. “It is easy to sell electric water heaters, as there is a common need for it. But for solar water heaters you have to create a want. It requires an entirely different perspective.” As a result, Sebastian invested heavily in the sector … and admits with a smile: “It could have gone either way.” However, his confidence in the Solahart brand was soon to reap rich dividends. “One thing I have learnt over the years is that if you do not have a good brand and a high-quality product, it is never a long-term venture. I have always held close to my heart the idea that quality is remembered long after price is forgotten, and that happens all the time.”

Sebastian had his work cut out for him, as that stage there was little awareness locally about solar water heating. “They knew about it, but did not believe in it. Even now, the most common questions is why do we need hot water in this region?” And yet hot water is a major consumer of electricity after air-conditioning, says Sebastian. Electric water heaters are prevalent in the winter months, when the temperature can drop as low as 15˚C – “and yet everyone wants piping hot water at 60˚C. Therefore I do not comprehend the reasoning that maintains we do not need water heating.”