South Africa: Eskom convenes Solar Industry Workshop

In early August, South Africa's national utility, Eskom, convened a workshop for solar water heating manufacturers, suppliers and installers. The primary objective of the workshop was to advise the industry on what to do about the remaining budget for the solar water heating rebate scheme, as well as which immediate steps to take until the end of the 2011-2012 financial year. Quality issues of currently installed systems were also discussed (see the attached presentation). The chart shows the strong increase in the number of applications for non-pressurised (NP) solar water heaters.
Source: Eskom

Eskom stated that South African Rand (ZAR) 328 million had originally been allocated for the 2011-2012 financial year and that ZAR 450 million had already been spent at a rate of over ZAR 100 million per month. For the remainder of the current financial year to the end of March 2012, an amount of ZAR 45 million per month has been allocated.

So far, the rebate scheme has had 600 industry participants and 285 registered products. A total of 141,000 systems have been installed with its assistance. Meanwhile, the Solar Water Heating Division of the Sustainable Energy Society of Southern Africa (SESSA), the industry body for solar water heating, has seen its membership numbers grow from under a hundred prior to the introduction of the rebate scheme to around 530. The South African Bureau of Standards (SABS) has also been able to extend its capacities for testing and solar water heating standards development, and the Plumbing Industry Registration Board has had more formal processes in place for some of the more specialised aspects of solar water heating installations.

Moreover, Eskom re-affirmed its intention to apply differential subsidies based on the local content of systems registered with the scheme. After first announcing in April that the subsidies would be in place in June, implementation was ultimately delayed because of the difficulties in determining the extent of local content in systems. According to the presentation held at the workshop, Eskom will have adopted a simpler approach by 1 October 2011, whereby a preferential subsidy will be given for systems of which more than 80% of the materials have been extracted and manufactured locally. SABS mark approval will, too, be required for local content confirmation.

Although the trend seems generally positive, some of the problem areas of the scheme to date include the fact that electricity savings are low in relation to costs. In addition, the quality of installations varies greatly, local manufacturing is under-represented, claims show irregularities, industry safety is quite low, and an appropriate funding model still needs to be found.

It would take a total of ZAR 125 billion to retrofit all homes and make use of solar water heating or heat pumps in the future. Eskom wants to form a task team to develop proposals for a final industry structure and funding model. The task team is likely to consist of members of the solar water heating industry, Eskom and SESSA, among other stakeholders. A follow-up workshop will be held in January to see how far the task team has come in achieving its goals.

In a separate but related development, the meeting of the South African Cabinet (the most senior level of government) on 24 August 2011 has approved the implementation of "key tasks" to speed up solar water heating uptake. They cover the development of guidelines for the market introduction of solar water heating, negotiations with potential funders and the establishment of a steering committee.

More information:
http://www.sessa.org.za/
http://www.eskom.co.za/live/index.php

Stephen Forder is a freelance writer and digital media specialist in South Africa who focuses on energy and sustainability related issues. +2783 603 0559 Skype: stephenforder