The world’s largest market for solar hot water collectors is China, with 80 percent of the global additions in 2004. China’s national goal is 65 million square meters by 2005 (which was almost met in 2004) and 230 million square meters by 2015.With its origins in small towns and villages in the 1980s, the market has been driven mainly by unmet demand for hot water, economics, and systems that sell for a small fraction of prices found in developed countries. Although there are no explicit policies for promoting solar hot water in multi-storey urban buildings, building design and construction by developers has begun to incorporate solar hot water as energy costs rise and public demand increases, particularly during the current construction boom. There are also government programs for technology standards, building codes, and testing and certification centers to help the industry mature.[N32]

Beyond China, at least 18 countries, and probably several more, provide capital grants, rebates, or investment tax credits for solar hot water/heating investments, including Australia, Austria, Belgium, some Canadian provinces, Cyprus, Finland, France, Germany, Greece, Hungary, Japan, the Netherlands, New Zealand, Portugal, Spain, Sweden, the United Kingdom, many U.S. states, and the U.S. federal government. Capital grants are typically 20–40 percent of system cost. Investment tax credits may allow deduction of all or part of the investment cost from tax liability. (Italy’s renewable energy certificates also apply to solar hot water, so-called "white certificates.") Israel appears to be the only country with a national-level policy mandating solar hot water in new construction. Since 1980, most buildings in Israel have been required to have solar hot water collectors. The technical requirements vary by size and type of building. Certain industrial, medical, and high-rise buildings are exempt. The European Commission was to consider promotion policies for renewable heating, including solar, potentially leading to a new directive.

At the local level, a number of major cities around the world have enacted ordinances requiring solar hot water in new buildings or providing incentives or subsidies for solar hot water investment. Examples are Barcelona (Spain), Oxford (UK), and Portland, Oregon (USA). Barcelona in particular has enacted one of the most far-reaching of such policies. Starting in 2000, the Barcelona Solar Thermal Ordinance has represented a major milestone in urban energy policy. The ordinance requires all new buildings above a specific size category (292 MJ/day hot water energy consumption) to provide at least 60 percent of their domestic hot water energy demand from solar thermal collectors. Swimming pool heating must be 100-percent solar. Buildings undergoing major refurbishment are also subject to the ordinance. The size category means typically that all commercial buildings, and all residential buildings of 16 or more households, are subject to the ordinance. Due to the ordinance, 40 percent of all new buildings now include solar hot water, and per-capita installed capacity (m2/1,000 people) has leaped 15-fold, from 1.1 in 2000 to 16.5 in 2004. The city’s objective is about 100,000 square meters installed by 2010.

Following Barcelona’s lead, other cities and towns in Spain adopted solar thermal ordinances as well, including Madrid,Valencia, Seville, Burgos, and Pamplona. The strong interest by municipalities prompted the Spanish Institute for Energy Diversification and Saving (IDAE) in 2003 to elaborate a solar ordinance template, largely based on Barcelona’s solar ordinance, which could be used by cities and towns as a basis for their own such rules. By November 2004, 34 municipalities and one region had adopted solar ordinances, with additional ordinances in the pipeline for 10 more regions (out of a total of 17). Results have been significant. For example, Pamplona’s solar ordinance, which entered into force in mid-2004, caused a 50-percent increase in solar thermal collectors in one year. A nationwide solar ordinance was under consideration and expected to be enacted in 2005.