The deliverable aims to highlight all the relevant elements of both internal and external environment, which impacts the development of solar heat in industrial process in agri-food industry.

Its final purpose is to provide an overview of different business models suitable for the development of SHIP2FAIR in food and beverage industries. To achieve these goals, a state of the art of the SHIP market worldwide and in Europe more specifically was conducted. An analysis of the environment, both intern and extern, was made through a SWOT matrix and a PESTEL study. This work package task also benefited from the support of the EU service Horizon Results Booster (HRB). They provided a methodology for the elaboration of the business model canvas. On top of that, workshops with SHIP2FAIR partners were held to add information related to the experience acquired through the work done so far in the project.

The market analysis revealed the many assets of SHIP as of today. Indeed, through the last two decades tremendous progress was made in terms of development of SHIP (Sola Heat in Industrial Processes) projects. 311 solar thermal installations have been identified worldwide with a total thermal capacity installation of 491MWth. However, it is important to note the gap between the different installations in terms of size. The world 3 largest SHIP installations account for 74% of the worldwide installed thermal capacity. With 74% of energy needs being thermal ones and 75% of consumed energy produced from fossil sources, the industrial sector has a great potential for solar heat. The branches mainly covered with solar heat worldwide are mining, agriculture, food & beverage, textile and chemical. Food and beverage industry have an important number of installations in comparison to others, but relatively lower capacity installed. During the last 15 years, in Europe, the power installed associated with SHIP projects for the food and beverage industry shows an ascending trend. The reduction of costs enabled through economies of scale gave a push in the right direction. Solar thermal has today competitive Levelised Cost of Energy (LCOE) (for South and Central Europe, 0.04-0.11 EUR/kWh based on IRENA report) in comparison to fossil fuels. The capital takes between 50-70% of the total costs. However, there are still many hindrances to SHIP expansion. One of the main seen by SHIP planners is the low fossil fuel prices. Actual inflation noted worldwide can be seen as an opportunity, but it also depends on other factors. For example, other obstacles are political regulations, financial support scheme, access to project financing and growing economy (source: solar Payback).

To fight all these barriers, a lot of effort should be put on stepping-up communication efforts to raise awareness of the technology among potential customers in industries, implementing a carbon pricing mechanism that reflects adequately negative externalities of fossil fuels consumption across the European economy and adjust their prices,supporting financing models to reduce risks and initial costs to small and medium industrial investors. On that last aspect, in Europe, different funding options have been developed.

The SWOT and PESTEL diagrams highlight the main advantages of solar heat and the existing opportunities. The main aspects that require further thinking and work were also identified. Finally, 3 different business models were suggested, and a business model canvas (BMC) was elaborated.

Read the deliverable here.