The Use of Heat: The Elephant in the Energy Room

When we talk about energy use in any economic sector, we tend to focus almost exclusively on electricity consumption. We often associate the word “energy” almost synonymously with “electricity.” Yet, there is a far more common — and frequently overlooked — form of energy use: heat.

From the simple act of heating water for showers, to generating hot water for cooking, or producing high temperatures for industrial processes, all of these applications require vast amounts of energy. In fact, heat accounts for 47% of global energy consumption (International Energy Agency), while electricity represents 21% and fuels for the transportation sector another 32%. Even more striking is the fact that, worldwide, approximately 90% of heat generation still relies on burning fossil fuels: natural gas, liquefied petroleum gas (LPG), diesel, or fuel oil.

A closer look at industrial energy consumption reveals an even greater imbalance: 74% of industrial energy use is heat, while only 26% is electricity. Consider any manufacturing process: while electricity powers motors, provides lighting, and drives machinery, the most energy-intensive stages are almost always thermal processes. Examples include pasteurization of beverages (milk, beer), textile dyeing and finishing, or steam generation for a wide range of industrial operations.

The industrial sector has spent decades working toward decarbonization and more sustainable processes. Unfortunately, the focus has largely been on generating clean or renewable electricity, while thermal energy uses remain less visible and less prioritized. For many years, the natural gas industry has carried out effective lobbying to promote the idea that natural gas is “clean.” This is a significant misconception: while natural gas may be cleaner than LPG or diesel in terms of certain pollutants, it is undeniably a fossil fuel. It is non-renewable and responsible for 21% of total energy emissions (Global Project Carbon), not only during combustion but also throughout its entire extraction, processing, and logistics chain.

Fortunately, renewable technologies now exist that can dramatically reduce industrial and commercial dependence on fossil fuels for heat generation. One of the most mature and widely adopted solutions is solar thermal energy, a proven technology already common in many countries and even mandatory in some building codes and municipal regulations worldwide.

The advantage of solar thermal technology, compared to what people more commonly know, like gas or electric heaters, is that it performs the same function, but it does so more cheaply, with energy savings, and in a sustainable way. That is, without burning fossil fuels and without emitting pollutants into the atmosphere. Globally, the solar energy market is colossal, and in Mexico, it is a market that has seen significant growth. In fact, today Mexico is among the Top 10 countries with the highest number of solar water heaters installed per year.

While adoption of this technology has increased outstandingly, the market continues to encounter considerable challenges; yet, it also offers substantial opportunities.

Solar water heaters technology has been adopted across different sectors in interesting ways. For example, in housing, 10% of homes in Mexico now have a solar water heater, considering that Mexico has more than 35 million homes, that means 3.5 million households now employ the sun for heating purposes. Quietly and gradually, the market has been growing. Today, when you look up at rooftops, you often see solar heaters. That speaks about vast opportunities.

In the industrial sector, we see a similar behavior. Mexico is a global leader as it has the most large-scale solar thermal installations for industrial heat generation in the world. There are over 200 large-scale industrial installations across diverse industries: pharmaceuticals, food and beverage, and automotive, among others.

While growth has been substantial, challenges remain. In renewable energy in general, the main challenge is that solar heat competes against so-called conventional fuels like gas, which is perceived as the status quo. There often is no environmental awareness, and people are also not used to thinking long-term. A solar water heater may have a higher upfront cost than a conventional heater, but once you add up the cost of gas, you recover your investment in two or three years from equipment with more than a 25-year life cycle. That is something most end users do not factor in. People only look at the cost of the equipment, not the cost of operating that technology. So that is a big educational challenge: getting people to compare and understand the true cost of technologies.

The second issue is environmental. Climate change is undeniable, and we all need to do our part. It is no longer just about awareness, it is about regulation. In many parts of the world, Europe, parts of Asia, and even the Americas, there are mandatory standards. In Mexico City, for example, there is a regulation requiring solar heaters. If you build a new home or a business with more than 30 users, you are required to install a solar heater that covers between 35% and 70% of your hot water needs, depending on your project. The goal is to reduce urban pollution. Here is a final figure: Mexico City alone has 2.5 million gas heaters that are turned on every day. Imagine the pollution generated by those devices — no one inspects them, no one maintains them. You only fix your gas heater when it breaks. That is where some of the biggest opportunities lie.

Unlike households, where individuals make the decisions, in industry spaces, ESG is now a major driver. In fact, it is no longer just about responsibility: many multinational companies already have a very clear decarbonization roadmap with goals set for 2030 or 2040. That creates an enormous chance for solar thermal technology to help decarbonize processes, eliminate gas use, and integrate these technologies alongside electrification. This, I would say, is already one of the biggest drivers in the sector: environmental responsibility and emission reduction targets. In Mexico, for instance, more than 10 states now have emissions taxes, something we did not have before. You have always paid taxes on waste or water, but emissions? This relatively recent advancement represents a major way forward to advance and promote enhanced sustainability in industrial heat generation as a crucial part of a sustainable energy transition accessible for all.