Abstract:In response to the impact of the United Nations Framework Convention on Climate Change, developing and using renewable energy sources and technologies have become vital for managing energy supply and demand in Taiwan. The long-term subsidy programs (1986-1991, 2000-present) for solar water heaters (SWHs) launched by the Taiwanese government constitute the main driving force for market expansion. By the end of 2013, the cumulative area of installed solar collectors was 2.27 million m 2 . Approximately 0.3 million systems (or 1.545 million m 2 ) are in operation. This corresponds to an annual collector yield of 0.92 TWh, which is equivalent to savings of 98.7 thousand tons of oil and 319 thousand tons of CO2,eq. The market-driven mechanism is associated with cost-to-benefit ratios, construction businesses, types of building architecture, degree of urbanization and household composition. The strong wind load of typhoons is another major concern. For sustaining the solar thermal industry in Taiwan, the dominant factor for disseminating SWHs in metropolitan areas involves developing building-integrated solar thermal systems. Alternative financial incentives are required for industrial heating processes in the commercial sector.