North America Solar Thermal Collectors Market Outlook, 2031

Market Drivers

• Industrial Process Heat Economics: Solar thermal's ability to decarbonize industrial process heat is the single most powerful driver in the North American market. Industrial process heat (IPH) represents about 10% of all U.S. domestic energy consumption, with roughly 60% of that demand (about 6,500 TBtu annually) falling in the medium-temperature range of 100–250°C, according to the U.S. Department of Energy (DOE). Flagship projects are proving the commercial case: GlassPoint will install 750 MWth of solar thermal technology at Searles Valley Minerals' California facility, reducing carbon emissions by up to half a million metric tons of CO2 per year. In Mexico, 288 solar process heat plants have been installed since 2017, making the country a worldwide leader in solar heat for industrial processes, according to FAMERAC. The DOE has further supported this with a $14 million investment in eight projects targeting extended system longevity and increased reliability.
• Supportive Federal and State Policies: A robust policy framework is accelerating deployment across all three nations. In the US, the Inflation Reduction Act provides a 30% Investment Tax Credit for solar thermal projects, and the One Big Beautiful Bill Act restored 100% bonus depreciation for Section 179D, stacking accelerated depreciation on top of the ITC for commercial users. In Canada, the Clean Technology Investment Tax Credit provides a refundable 30% credit on capital costs for eligible clean technology property. In Mexico, the INFONAVIT Green Mortgage program integrates the cost of solar water heating systems into social housing loans, and Mexico City has implemented a solar obligation for new buildings. These policies are critical for improving project economics and reducing payback periods.

Market Challenges

• Policy Gaps and Competitive Alternatives: Despite supportive federal frameworks, significant policy gaps remain. In Canada, solar water heaters are not explicitly mentioned as eligible technologies within the national Greener Homes Grant programme, leading to continued demand decline and market withdrawals by equipment suppliers, according to NRCan. In the US, the One Big Beautiful Bill Act eliminates Investment Tax Credits for solar water heating projects leased to third parties, disrupting a key financing model for residential adoption. Across the region, solar thermal must compete directly with low-cost natural gas and rapidly falling photovoltaic-plus-heat-pump systems, which benefit from broader market momentum and brand familiarity. This competitive pressure is most acute in the residential segment, where consumers prioritize simplicity and upfront cost over long-term efficiency.
• Permitting and Interconnection Complexity: The North American market faces significant challenges from a fragmented and often opaque permitting and interconnection landscape. In the US, projects must navigate a complex web of federal, state, and local regulations, including Section 201 tariffs and anti-dumping/countervailing duty (AD/CVD) frameworks. In Canada, the market is driven by a patchwork of provincial and territorial programs, creating inconsistencies for manufacturers and installers. In Mexico, while the federal government has announced an US$800 million investment in two thermosolar power plants, the regulatory framework for distributed solar thermal remains under development. This complexity increases project costs, extends development timelines, and creates uncertainty for investors.

Market Trends

• Concentrating Solar Thermal for Industrial Decarbonization: The most significant trend in the North American market is the pivot toward concentrating solar thermal (CST) for industrial process heat. The DOE is funding projects like the CertainTeed asphalt manufacturing plant to install solar collecting parabolic mirrors, and the Generation 3 Particle Pilot Plant (G3P3) is being commissioned at NREL. GlassPoint's 750 MWth project in California will be a landmark installation, combining direct solar-to-heat technology with advanced thermal storage to deliver continuous, carbon-free steam. This trend is driven by the superior economics of CST at higher temperatures, where it can displace natural gas in industries such as mining, food processing, and chemicals.
• Hybrid PVT and Building-Integrated Solutions: The convergence of photovoltaic and thermal technologies is gaining commercial traction, particularly in Canada and the US. In Canada, sales of uncovered PVT collectors, which serve as a heat source for heat pumps, rose sharply in 2024, according to NRCan. In the US, companies like Naked Energy are deploying hybrid PVT collectors, with their VirtuPVT technology achieving UL certification in 2025. These systems maximize energy yield per square meter, making them ideal for buildings with limited roof space. The trend is supported by research from NREL, which has achieved 91% to 93% bifaciality on perovskite solar cells and is developing tandem cell designs that could further boost hybrid system performance.