Friday, August 28, 2009

Eskom's solar heater plan slowly gains momentum

August 26, 2009 - By INGI SALGADO

Eskom subsidised 1 520 solar water heaters in the first half of this year - nearly double last year's rate but still far too few to meet a target of installing 925 000 solar geysers by 2013.

"Installations are definitely slower than we would want," Andrew Etzinger, Eskom's general manager of customer network business, said this week. "Nevertheless, we are seeing very encouraging signs coming through of a change in the market."

Large local electrical geyser manufacturers were starting to make solar water heaters, while other industries were keen to leverage "mass production capabilities", Etzinger said.

In addition, insurance companies were finalising changes to rules to allow homeowners with burst geysers to claim funds towards the cost of installing solar water heaters, he said.

But solar geyser installers say the global financial crisis has started to hit the market hard.

Dylan Tudor-Jones, who chairs the solar heating division of the Sustainable Energy Society of Southern Africa (Sessa), said every member was "moaning that people are holding onto their money". Last month, 19 of Sessa's 194 members - mostly equipment importers - stepped down, suggesting they had closed shop or stopped dabbling in solar installations.

"I am still very positive that things are going to turn. I'm just not sure when," Tudor-Jones said.

Solar water heating has been identified as a critical component of Eskom's demand-side management programme, which calculates that 925 000 solar water heaters would reduce electricity use by 578 megawatts. By extension, installing solar geysers in every South African household would result in savings equal to a coal-fired facility the size of the Medupi plant, which is under construction.

While the number of Eskom-accredited suppliers has swelled from 10 a year ago to about 100, key impediments remain to meeting the target: high costs, low incentives, and a wide skills deficit in installation capacity.

The Eskom rebate, set by the National Energy Regulator of SA (Nersa), varies from R2 000 to about R5 000 an installed system, depending on efficiency savings measured by the SA Bureau of Standards. According to Etzinger, the cost for a system has fallen from between R17 000 and R35 000 to between R10 000 and R35 000.

Eskom spent R5.3 million on subsidies in the first half, equal to an average rebate of nearly R3 500 a system.

Ompi Aphane, the acting deputy director-general for electricity, nuclear and clean energy, said the Department of Energy planned to draft regulations requiring Nersa to set tariffs subsidising solar water heaters as part of its renewable energy feed-in tariff schedule.

The new subsidy will replace the existing subsidy of about 20 percent. "This would be a life-cycle approach, based on sustainable displacement of grid-connected energy. It would be a 100 percent subsidy," Aphane said. "Watch this space."

For the utility to meet its target, an estimated 5 000 plumbing teams are required by the end of the target period, whereas about 100 dedicated teams are now operational.

There is currently only one registered training provider for solar water heater installations, although Sessa is attempting to develop a curriculum for all service providers.

Tudor-Jones said the responsible sector education and training authority for training solar water heater installation was the Construction Education and Training Authority. Aphane said a training programme was being institutionalised in conjunction with the Energy Sector Education and Training Authority.