Chennai, July 17 (IANS) The central and state governments should look at making factories eco-friendly by encouraging use of solar water heaters, said a top industry official.

'Solar water heaters offer industries good scope for reduction of fuel cost - wood or furnace oil. The solar water heaters can be used initially to heat the water and then use wood or oil fired boilers to heat up the water to the required temperature,' A.K. Rathi, managing director, Racold Thermo Ltd told IANS here.

The Rs.200 crore turnover Racold - a wholly owned subsidiary of Italian Euro 1.1 billion Ariston Thermo group - is the market leader in water heaters in India.

An integrated manufacturer of water heaters, Racold makes around 400,000 units at is 500,000 units per annum Pune plant.

According to Rathi, solar water heaters have good presence in residential and commercial establishments but not in industries where hot water is used in production process.

'For example dyeing units can use solar water heaters to initially heat up the water say up to 60 degrees and then switch on to conventional systems to take the temperature to the required level. To that extent there will be sizeable energy savings,' he added.

Stating the response from industries is lukewarm Rathi added that some companies like L'Oreal India have been proactive in this respect.

He said the Rs.120 crore Indian solar water heater market would log higher growth in residential and commercial segments than electric or gas powered ones owing to its lower base.

Meanwhile, with competition increasing after dereservation of the water heater segment, Racold in order to maintain its leadership is launching new products.

Rathi hopes the company's new product for the residential segment, Primo, will have an edge over competitors.

'Gone are the days when water heaters were just a water tank with a heating element inside. Today water heaters have technology,' he said.

According to him, the five star energy efficiency rated Primo's timer enables a user to get hot water when he wants as it calculates the time required to heat up the water.

He said the Rs.600 crore domestic water heater segment largely consists of electric (Rs.450 crore), solar (Rs.120 crore) and gas (Rs.30 crore) heaters.

On the market trend he said hitech large capacity heaters with high pressure rating are in demand.

He said the company will be investing around Rs.10 crore to increase the production of polymer coated domestic water heaters as well as to introduce new products.