In many countries, governments have introduced laws mandating trans­mission companies and electricity utilities to provide transmission or pur­chase electricity generated from renewable energy technologies, including solar. In January 2006, China, for example, issued the Renewable Energy Law, mandating utility companies to purchase “in full amounts” renew­able energy generated electricity within their domains at a price that in­cludes production cost plus a reasonable profit. The extra cost incurred by the utility will be shared throughout the overall power grid (GOC, 2005). Similarly, in Germany, all renewable energy generators are guaranteed to have priority access to the grid. Electric utilities are mandated to purchase 100% of a grid-connected PV system’s output, regardless of whether the system is customer-sited or not.

Government regulations mandating installation of solar thermal sys­tems is the main policy driver for the development of solar thermal appli­cations in many countries (e. g., Spain, Israel). Israel has had a solar water heating obligation for new construction in place since the 1980s, but it did not spread to other countries immediately. In the late 1990s, the City of Berlin proposed to create a similar solar water heating mandate, but was unsuccessful in its attempt. The Spanish city of Barcelona, however, adapted the proposed Berlin mandate, and passed an ordinance in July, 1999, requiring that all new construction or major renovation projects be built with solar water heating (Schaefer, 2006). The original ordinance, which targeted only certain building subsets, such as residential buildings, hotels, and gymnasiums, required that at least 60% of the hot water load be supplied by solar energy. The “Barcelona model” was adopted by 11 other Spanish cities by 2004 (Pujol, 2004), including Madrid, and in 2006, Spain passed a national law requiring solar water heating on new construc­tion and major renovations (ESTIF, 2007).

In China, the Renewable Energy Law requires the government to for­mulate policies that guide the integration of solar water heaters (SWH) and buildings; real estate developers to provide provisions for solar energy utilization; and residents in existing buildings to install qualified solar en­ergy systems if it does not affect building quality and safety (GOC, 2005). In regions with high solar radiation, hot water intensive public buildings (such as schools and hospitals) and commercial buildings (such as hotels and restaurants) will be gradually mandated for SWH installation. New buildings will need to reserve space for future SWH installation and pip­ing (NDRC, 2008). At provincial and local levels, the governments have issued various policies for SWH promotion; for instance, Jiangsu, Gansu and Shenzhen require buildings of less than 12 floors to be equipped with solar water heaters (Hu, 2006 & 2008).