The government has set the target of 10 000 GWh of renewable energy generation by 2013 and Eskom is expecting its Solar Water Heating Programme to contribute up to 23% of this target. According to Cedric Worthmann, the Solar Water Heating Programme manager at Eskom, the programme has delivered an average of 6.4 GWh per annum to date.

Worthmann says that the significant increase of the rebate was calculated in order to allow a five-year payback period. “This calculation is done taking into account the average cost of systems, average savings per system, average electricity tariff rate and cost of capital at prime interest rate per system size,” says Worthmann.

Solar by law?
James Shirley, General Manager at Kayema Energy Solutions, says that although the Eskom rebate increase has caused a significant increase in solar water heater sales, he doubts that the government’s target will be reached.

“The rebate is definitely helping the solar water heating industry, but I doubt that government will be able to achieve such significant market penetration,” says Shirley. “Eskom have raised the rebate in order to make solar water heating systems financially viable for the public, but unless government is going to make solar water heating systems compulsory for all new buildings, I don’t see how we will achieve 10 000 GWh of renewable energy generation by 2013.”

Barry Bredenkamp, operations manager at NEEA (National Energy Efficiency Agency), says that he doesn’t think it will be necessary or practical for government to make solar water heaters compulsory. “In some instances, solar water heaters are just not practical,” says Barry before explaining that if a building’s orientation doesn’t lend itself to the optimal use of the technology, or for example, where indigenous trees provide a natural barrier between the building and the sun and where an alternate technology, such as a heat pump, may provide a better solution for the application.

“However, with the rising price of electricity, the increase in subsidies and the reduction in the price of solar water heaters as more competitors enter the market, I believe we will see a natural evolution from conventional electrically-operated geysers to more efficient solar water heaters, without legislation being introduced,” says Bredenkamp.

Changing the rebate requirements
Shirley also says that the requirements that enabled consumers to qualify for a solar water heating rebate (i.e added cost of installed equipment) were too high, and offset the previous rebate amount, and the administrative work around claiming the rebate was laborious. “Eskom had a lot of prerequisites concerning not only the heating system, but also the installation, putting a lot of consumers off the process of installing these systems because, it was too difficult to claim the rebate,” says Shirley.

According to Shirley, there is a lot of paperwork involved in claiming your solar water heating rebate from Eskom, but it isn’t difficult. “You generally wait about eight weeks to get your money back. This is not an extremely long time, but I’m thinking that people are a bit strapped for cash when they are waiting for their claim to be processed, which is deterring them from getting a solar water heating system.”

“The new process for claiming is very simple: the reason people think it is difficult is that generally, people do not read instructions, and are being misled by suppliers that are not prepared to join the programme,” says Worthmann.

www.eskom.co.za/dsm states the rebate system is not in anyway exclusive. The current requirements of a supplier to sell systems that qualify for rebates are the following:
• Be able to offer a five year guarantee
• Submit documents, including public liability and company details
• Have system tested and passed at the SABS for the following:
o Safety
o Mechanical
o Thermal

The actual rebate claiming process
The ten step program on reclaiming a rebate (according to the Eskom-system), can be summed up as follows:
• Thoroughly research the solar water heating system.
• Call EEDSM Help or visit www.eskom.co.za/dsm to get an approved supplier.
• Get an Eskom approved installer to install the (Eskom approved) system.
• Make sure an (Eskom approved) timer is installed by an ECB registered electrician.
• Get your supplier, installer and electrician to fill out the relevant details on your claim form.
• Complete the rest of the details and attach the relevant documents (original invoice, copy of ID, copy of utility bill and/or electricity bills are listed as examples).
• Post the claim to the facilitating auditors (Deloitte) in a self addressed envelope or drop it off in a designated drop box within six months of installation.
• Wait for a SMS notification that a) the facilitating auditors have received your application and b) when your application is processed and queued for electronic funds transfer/your form is incomplete.
• Payment is made within eight weeks of receipt.
• Random technical audits will be carried out on some systems to ensure installation quality and operation.

Types of solar water heating systems
According to Shirley, there are two main types of solar water heating system; the closed loop and the open loop heating systems. “A closed loop system uses heat exchanger fluid and an open loop means that your actual drinking water goes through a tube through the solar panel.” Shirley says that South Africans have three general solar water heating categories to consider when choosing a system:
1. Thermo-siphon systems. This solar water heating system works like a heating suction where the tank sits above the solar panel of tubes. Water temperature and density are used to create the heat cycle of the system.
2. Pumped or split system. The tank of a pumped or split system is separate from the collector (the tank is usually in the roof in this case).
3. Retrofit. Although a bit of money will be saved when retrofitting an electric geyser to work as a solar water geyser, Shirley believes that this is not the correct way of installing a solar water heating system if the current geyser is more than three years old and an entirely new system should be installed instead of retrofitting an existing geyser.

Proven technology – the problem is money and public buy-in
The value of Eskom’s solar water heating rebate is based on the capability of the system to replace the use of electrical energy and all solar water heating systems included in the programme will have a SABS test conformity report rating their efficiency (www.eskom.co.za/dsm). Based on these test results, a system will qualify for a rebate ranging typically between ZAR1 500 and ZAR5 000.

www.eskom.co.za/dsm states that electrical geysers use between 30% and 50% of a household’s monthly electricity bill and replacing a conventional geyser with a solar powered system will reduce that percentage of electricity consumption by up to 70%.

“The technology is proven internationally and people now trust the technology in South Africa. The only problem is funding. Even though the solar water heating rebate has made the payback period more viable, the general public still has to be convinced to spend the initial capital on purchasing a system. The client then needs to recover the subsidy from a third party, which means that they are burdened with the administrative issues involved,” says Shirley.

The deadlines
“The important thing is that the rebate won’t last forever and it has been put in place to encourage people to switch now rather than later,” says Shirley.

Worthmann confirmed that there is in fact a deadline for Eskom’s programme. “The Solar Water Heating Programme will continue until 2014 as per an agreement with the Minister of Energy, or when the first million units are installed,” says Worthmann. “Eskom is engaging with various financial institutions and insurance companies, to increase the uptake of SWHs in the programme. People don’t want to spend money on replacing a system that is functioning, which is why we are engaging with the insurance companies to replace damaged geysers with solar. We are also focusing on working with the municipalities to assist them to help their consumers to convert. This rebate will be offered to all qualifying persons and installations as long as funds are available.”

Electrical geysers – who is losing?
“In the solar water heating industry, almost all geyser manufacturers have either completely switched to solar water heating systems or they are including solar ranges into their product offerings,” explains Shirley. “The industry knows that solar water heating is the future and everyone is adapting. I don’t think there are any suppliers who truly believe that selling only electrical geysers is a financially viable option – power is getting too expensive and that situation is not going to change. We need to change the way we heat water.”

Bredenkamp comments that although solar water heating systems are more widespread today, there are still people selling electrical geysers. “Like I’ve said before, there are certain applications where there is no choice but to install an electric geyser. Many solar water heaters are installed in parallel with an electric geyser, which serves as a back-up for when there are extended periods of inclement weather, so we can’t just do away with electrical geysers,” says Bredenkamp.

Solar water heating life cycle
Shirley says that, “the life cycle of electric geysers and solar water heating systems are more or less the same”.  “Electric geysers generally have a five year guarantee, some have a ten year guarantee, and the design lifetime of a good solar water heating system is around 20 years.

Although www.eskom.co.za/dsm states that most systems are guaranteed for five years, the expected life of the equipment is between ten and 15 years and that each piece of equipment has a different profile, which depends on various elements such as geographical area, water usage profile, number of users and the size of the system.

Bredenkamp explains that even if you had to replace a relatively more expensive solar water heating system approximately every ten years, the energy savings that one receives is still worth the more expensive initial costs.

“The energy savings will definitely make up for the initial costs of the system, but there are some instances where it would not be worth it, such as a holiday home that is only used for one month of the year. It is not really a good idea having a ‘un-utilised’ solar water heater installed, as the pressure build-up can lead to problems with various components of the system, such as the rubber seals,” says Bredenkamp.

“Although in principle, we would like to see as many solar water heaters on roofs as possible, one has to do a realistic assesment of the situation and a simple calculation, to determine the sheer economics of the specific application.”

Imports not designed for our climate or resources
www.eskom.co.za/dsm states that although solar water heating technology is not new to the industry in South Africa, it is still characterised by high manufacturing costs and low sales volumes.

“Although the market for solar water heating systems in South Africa is certainly growing, the biggest concern for local suppliers is reputable companies being bombarded by people overseas bringing back cheap goods,” says Shirley. “The problem is not only that overseas solar water heating suppliers don’t have a proper working knowledge of our national codes of practice or that they can not offer a back up service, the problem is that these products are not always designed for South Africa’s climate or resources. Our ambient temperature and solar radiation levels are not the same as many overseas countries, meaning that there needs to be corrective design at the factory level to ensure correct water temperature limits are met for imported systems.

Bredenkamp says that although there will always be the problem of cheap imports, South Africa has standards and procedures in place to protect consumers from the majority of poor quality solar water heaters.

“There will always be cases where opportunistic individuals see a business opportunity and start importing ‘cheap’ products from various countries abroad. We in South Africa are lucky in this respect, since all products that want to qualify for a subsidy, need to be tested and passed by the South African Bureau of Standards (SABS). There is a national standard with which the products need to comply and the SABS and the Tshwane University of Technology have the equipment to test products according to this standard,” says Bredenkamp.

“However, we must caution the public against purchasing solar water heaters that may initially appear to be cheaper (even without any subsidy), than those who have been tested by the SABS. In most cases, these products will not withstand the test of time and the supplier or distributor may not be around in future to honor any given guarantees. It is therefore imperative that the public insist on seeing a SABS test report of the specific product, before making a purchase decision.”

Engineering precision of commercial solutions
Shirley says that commercial solar water heating systems are very different from the types of solar water heating systems that home owners use. “Commercial solar water heating systems are an entirely different story,” says Shirley. “A lot of engineering work is involved and the costs are obviously higher. Instead of installing one or two panels, you may need over 100 panels with large storeage tanks in the case of a hospital or hotel where a lot of hot water is consumed. But even though this is expensive, the electricity savings does make it financially viable.”

According to Worthmann, Eskom will have a programme in place for commercial applications this year. “We are busy formalising a commercial sector solar programme which we hope to launch mid-year. There are many competent companies that can design and install these large systems, and have being doing so for many years,” says Worthmann.

“The way I see it, solar water heating systems for commercial applications are about reducing a company’s carbon footprint and lowering your operating costs. A solar water heater should be seen as an investment, not a product. When you buy a solar water heating system, you are buying hot water for the next 15 – 20 years and you are using a lot less energy for this hot water,” concludes Shirley

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