Solar Water Heater Market Development and Energy Efficiency Project

Project General Information



Climate change

Climate Change


The proposed GEF project


The project’s objective is to support the  national efforts to establish the market for solar thermal heating systems and cost-effective CO2 measures (through capacity building and institutional strengthening and technology demonstration)


The envisaged outcomes and outputs of the project are summarized in the table of Part I of the PIF.


Knowledge management for informed policy decision-making


The GEF project will review the baseline policy, legislative and regulatory frameworks that impact the application of efficient and technologies in buildings and small and medium enterprises (SMEs), with special attention to thermal (solar) energy. Current building codes and regulations[1] as well as the set of current financial instruments and incentives and complimentary measures[2] will be assessed and examined as part of energy improvements in general and SWH application in particular.


The pilot projects and the capacity and institutional strengthening activities of the project will be monitored and evaluated so that lessons and experiences can be drawn, disseminated and channeled into subsequent replication efforts and into the overall policy and regulation making process in Panama.


The component will also serve as the knowledge and information management component. This starts with a thorough assessment of the market for SWH and possible applications of SWH and to learn the characteristics of each market segment (sectors, i.e. home owners, hotels, public sector buildings, agro-industrial facilities, etc.) or geographical area (climate conditions) as well attitudes and preferences of decision-makers and consumers).  A similar study should be conducted at the end of the project to assess the impacts of the project. Such an ‘end-of-project’ study would provide inputs into a post-project ‘strategy and action plan’ that would highlight the remaining gaps and barriers and delineate the most cost-effective and relevant policies and measures (control and regulations, market-based instruments, incentives, support and information) to address these gaps and thus guarantee sustainability.



Quality control and supply side strengthening


The project will raise knowledge and information on the introduction of quality assurance measures regarding SWH technology, including a voluntary national system of certification and labeling of SWH products[3] (e.g. by a future association of thermal energy or similar entity). The project will support existing testing facilities to expand their capacity on testing of SWH systems as part of the national quality control mechanism[4].


The project will support the drafting of an installation standard and manual and provide training courses on proper installation of SWH systems to technical retrofitters and plumbers. This also involves training of a cadre of professional mechanical and HVAC engineers, designers and planners. Installers that pass the examination could be recognized as a ‘trained solar installer’. Existing curricula will be assessed and technical support provided to educational institutes and universities to integrate solar thermal technology and green building design and technologies in general in electrical and mechanical engineering courses. Technical materials, syllabi, etc. will be prepared or adopted to circumstances in Panama and made available. The project will also address the need for improving the building energy performance by integrating SWH in the design or retrofitting, focusing on building designers, architects and developers. 

The project will work closely with importers and distributors on system design and proper installation, market analysis, installation, and after-sales service during operation and maintenance[1].  Given the absence of an industrial association for solar energy, the project will support the establishment of such an organization.


End-user supportive mechanisms


On the demand side, the project will raise awareness and provide information with the aim of transforming public perceptions and attitudes on substitution by new technologies (solar thermal)  and simultaneously addressing the scant knowledge about energy efficiency opportunities in general. Decision-makers in commercial and public sector (building developers, architects, local government, building managers) as well as individual home owners do not perceive SWH as an option and providing information on technical feasibility, costs and benefits and environmental aspects is essential for starting market development. Regarding end-users, the project will provide neutral and independent information that may be trusted by the potential end users more than company advertisements.


The project will promote alliances between government agencies and entities, SWH suppliers, chambers and associations of industry to disseminate info on SWH to potential end users. Best practices and examples in other Latin American countries (e.g. Mexico, Brazil) will be highlighted; existing promotional and training material from other countries will be examined and revised for adoption under Panamanian circumstances.


Only few banks have experience with renewable energy investment, let alone with SWH. The project will raise awareness on SWH and (with information obtained from good market surveys) and in cooperation with building developers and SWH companies, identify appropriate finance sources and mechanisms to support both companies (especially SMEs) that sell SWHs and consumers that want to install (e.g. by means of soft loans, green mortgage schemes). The project will support the design and implementation of innovative and tailored end-user financing mechanisms (coupled with some financial incentives, see component 1).


SWH pilot projects and demonstration


The pilot demonstration component of the project will focus on water heating in buildings and thermal heating/drying in industrial processes. Measures to introduce SWH technology will be supplemented with the cost-effective energy efficiency measures in the water heating and water use system and other improvements in the building (efficient lighting and luminaires, efficient space cooling, air-conditioning and better window isolation, as well as better ‘energy housekeeping’ practices, such as switching off appliances that are not in use and electricity use monitoring).


The pilot demonstrations will be carried out in those buildings and/or sectors that are deemed to have high potential for SWH market development, including hotels and restaurants, hospitals and rural clinics, agro-industries (milk industry, drying), larger industries (e.g. bottle cleaning and washing)  and residential housing (showers, cloth and dish washing). The focus will be on low-temperature applications, i.e. applications with water heated to 50-100oC. Examples of applications are warm water supply, (e.g. for showers and washing, heating of swimming pools), drying, cleaning  and washing of agricultural products, such as coffee (50-70oC), solar cooling as well as pre-heating of water (e.g. cloth washing, boilers, pasteurization, etc.)


Apart from implementing the pilot projects, a pipeline of opportunities will be identified for post-project replication and, where possible and necessary, offered for financing to the appropriate financing channels, taking advantage of the financial incentives and fiscal instruments, identified in the other components of the project.



Full Size Project(FSP)


Latin America and the Caribbean


GEF Trust Fund

Stage Grant to UNEP Grant to other IA Co-Financing UNEP Fee Other IA Fee
$ 1,927,000.00 $ 0.00 $ 8,900,000.00 $ 183,000.00 $ 0.00
$ 45,660.00 $ 0.00 $ 0.00 $ 4,340.00 $ 0.00



Executing Agency Category
Panama: National Environmental Authority (ANAM)
National Government Agency

Partner Category

Name Category Period
Edu Hassing

Moderate Risk

Medium: Lack of coordination between various government entities and with private sector stakeholders and the financial sector. Mitigation Measure: Extensive stakeholder consultations, awareness raising, capacity building and other advocacy work during the project preparation and implementation with an effort to identify “local champions”. Early engagement of decision makers in the project preparation and implementation. Medium: Delayed implementation of regulations under the new UREE Law in general as well as of new regulations and quality control measures specifically targeting SWH. Mitigation Measure: The project will mitigate this risk by seeking to engage and coordinate with key public authorities as well as private sector associations, responsible at different levels for the actual implementation SWH related regulations and quality control systems with related capacity building, when and as needed. Low : Lack of motivation and ultimate interest of the targeted stakeholders to participate in and learn from the training and capacity building activities organized by the project.Mitigation Measure: Creating incremental value for training by identifying and raising the awareness of the targeted supply side stakeholders on new business opportunities resulting from training and supporting the establishment of sustainable demand for the new services on EE and solar thermal and/or products. High: The market development efforts and promotion mechanisms established are not sustainable due to lack of demand for SWH. Mitigation Measure: The project will address the various gaps that inhibit market penetration of SWH in a holistic way by simultaneously dealing with supply side and demand side issues. The integration of a realistic exit strategy into the project design with the commitment of the key stakeholders to support this strategy, including incentives and financial support mechanisms and continuing SWH promotion and information campaigns on the longer-term economic benefits of SWH and EE measures.


Fiscal Year Project activities and objectives met

$ 0.00