Scholarly article on topic 'Policy Pitfalls of SWH'

Policy Pitfalls of SWH Academic research paper on "Earth and related environmental sciences"

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Energy Procedia
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{"South Africa" / "Solar water heaters" / Rebates / "Drivers for solar installations" / "Policy creep"}

Abstract of research paper on Earth and related environmental sciences, author of scientific article — Ernst Uken

Abstract Strategies aimed at promoting the use of solar water heating in the residential sector, may fall short of logical expectations for a number of reasons. These are identified and evaluated in the South African context. Developing countries are financially not in a position to accept that solar technology should be promoted to sustain the environment. The main driver appears to be affordability in the short-term. In the past, coal-fired electricity was relatively inexpensive in South Africa. This is rapidly changing, since the national demand is outstripping the supply. Government has therefore set a target of one million SWHs installations in homes by 2015. Local manufacturers cannot meet this demand. In order to avoid dumping of inferior quality imports, the South African Bureau of Standards announced their industry manufacturing standards some three years later. Eskom, the state-owned utility, is offering a rebate for approved installations of high and low-pressure hot water systems. Industry responded by increasing the selling price of local and imported systems. The net result is a 10-year payback period, instead of the original 3-year period. The uptake is thus disappointingly slow in the high-pressure, hybrid systems. The rebate is proportionally larger for the lower income groups, hence a greater demand for low-pressure systems. Lessons learned should assist policymakers in similar developing countries. Neither the abundance of solar irradiation nor the obvious environmental advantages acted as prime motivators for this deserving programme.

Academic research paper on topic "Policy Pitfalls of SWH"

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Energy Procedia 30 (2012) 1432 - 1434

SHC 2012

Policy pitfalls of SWH

Prof Ernst Uken

Head: Energy Institute, Cape Peninsula University of Technology Cape Town, South Africa. ukene@cput.ac.za

Abstract

Strategies aimed at promoting the use of solar water heating in the residential sector, may fall short of logical expectations for a number of reasons. These are identified and evaluated in the South African context. Developing countries are financially not in a position to accept that solar technology should be promoted to sustain the environment. The main driver appears to be affordability in the short-term. In the past, coal-fired electricity was relatively inexpensive in South Africa. This is rapidly changing, since the national demand is outstripping the supply. Government has therefore set a target of one million SWHs installations in homes by 2015. Local manufacturers cannot meet this demand. In order to avoid dumping of inferior quality imports, the South African Bureau of Standards announced their industry manufacturing standards some three years later. Eskom, the state-owned utility, is offering a rebate for approved installations of high and low-pressure hot water systems. Industry responded by increasing the selling price of local and imported systems. The net result is a 10-year payback period, instead of the original 3-year period. The uptake is thus disappointingly slow in the high-pressure, hybrid systems. The rebate is proportionally larger for the lower income groups, hence a greater demand for low-pressure systems. Lessons learned should assist policymakers in similar developing countries. Neither the abundance of solar irradiation nor the obvious environmental advantages acted as prime motivators for this deserving programme.

© 2012 Published by Elsevier Ltd. S election and peer-review under responsibility of the PSE AG

Keywords: South Africa; solar water heaters; rebates; drivers for solar installations; policy creep

1. Introduction

For years, South Africa has been enjoying inexpensive, coal-based electricity. Since 2008, the 42 000MW supply from the state-owned Eskom utility company, can no longer meet the demand. Thanks to the nation-wide electrification drive, access to the national power grid has been pushed up to 72 per cent, whereas neighbouring states still lie below 10 per cent. The dwindling power reserves are also being used up by industrial growth. An obvious solution is the use of renewable energy. Research showed that although the residential sector is a small user, its peak demand falls into the overall national morning and evening peak demand periods. Furthermore, water heating constituted the following proportions of

1876-6102 © 2012 The Authors. Published by Elsevier Ltd. Selection and peer-review under responsibility of the PSE AG doi: 10.1016/j.egypro.2012.11.157

Ernst Uken/Energy Procedia 30 (2012) 1432 - 1434

electricity consumption in suburban areas (46%); in townships (30%); and in informal settlements (18%). The stage is thus set to promote solar water heating, in a country averaging over 8 000 MJ/m2 per annum, as shown in Figure 1.

2. Policy formulation

Government set a target of having 1 million SWHs installed in households by 2015. Local manufacturers could not meet this, so their products would have to be supplemented with imported units. To avoid dumping of poor quality products, the South African Bureau of Standards eventually promulgated standards for installed units. This procedure caused a delay of 3 years. Eskom and the Department of Energy assisted the programme by offering a rebate for approved installations for both, high-pressure and low-pressure systems. Promising earlier results in a suburban home, showed average savings on the monthly electricity bill, measured over 10 years, of 37 per cent.

3. Policy-linked results

Two main types of SWHs are promoted in South Africa: (a) high-pressure geysers with electricity back-up, suitable for shower and tap/faucet mixers and (b) low-pressure, gravity-feed geysers with or without electricity back-up for systems with separate hot and cold taps/faucets. Customer rebates were granted via 650 registered suppliers /installers of:

• High-pressure, solar-electric SWHs: 29 449 new units or replacements, receiving a 30% subsidy from Eskom. These 150-litre units and larger are mostly in suburban areas, where water heating is used on a large scale

• Low-pressure, first-time SWHs: 72 257 new units, receiving almost a full 100% subsidy now via municipalities. These 150-litre and smaller units are found mostly in townships, where less hot water is being used per resident.

Since April 2011, the average rate per month, came to 15 520 installations. Thus 186 240 units pa would take 5,4 years. Having started seriously only in April 2011, the earliest date of achieving the target at the present rate, would be August 2016. In order to achieve the target by December 2015, ie. in 4 years time, the present rate would have to be increased by 5.4/4.0 = 1.35 times, averaging 20 952 per month.

4. Discussion of results

Figure 1 suggests that South Africa should rank very highly in the field of SWHs, but according to the World Ranking [2], it only ranks 18 out of 52 countries in terms of Total MWth. The present capacity is 744 MWTh , primarily unglazed (528), followed by glazed (202) and evacuated tubes (14). The latter should grow appreciably, particularly in larger homes, hostels and small hotels.

According to Section 3, a 'policy creep' has crept in, favouring lower -income households with smaller units, using less power, instead of where more energy could be saved. This may be a laudable approach, but it is at the expense of saving electricity.

Ernst Uken / Energy Procedia 30 (2012) 1432 - 1434

Sou№ African Renewable Energy Reeource Database - Annual Solar Radiation

Fig. 1. Annual solar irradiation map of South Africa 5. Conclusion

The policy was originally aimed at reducing the energy demand for heating domestic water. Through the skewed rebate, however, the demand has shifted from the larger high-pressure SWHs to the smaller low-pressure systems, where on average only 0.32 kW may be saved instead of the targeted 0,625 kW per system. The policy has thus undergone a shift towards favouring the first-time users of hot-water systems, found mostly in the lower-income communities. To save the same amount of energy, almost twice as many SWHs will thus have to be installed than planned originally. Further more, less electricity is being used for water heating in township-based homes. 'Eskom seeks to bolster SWH roll-outs by introducing standard-offer contracts with suppliers/installers' [3]. The results are being monitored with interest by various Measurement and Verification (M&V) teams.

References

[1] Author. Domestic water usage in South Africa. Proc of 10th Rehva World Congress, Clima 2010, 9-12 May 2010, p438-9, Antalya, Turkey

[2] Solar Heat Worldwide, IEA SHC, 2010

[3] Creamer T. Eskom seeks transition from rebates to contracts to bolster solar-geyser roll-out. http://www.Engineering News.co.za/print-version Eskom-seeks-, Accessed 14 October 2011