Eskom exited the SWH rebate programme, which had been under way since 2008, with the DoE taking responsibility, effective February 1, for any future funding and the continuation of the programme.
Government believed the roll-out of SWHs could contribute 23% of its overall energy savings target.
However, the SWH programme, which offered rebates of between R5 000 and R12 000 depending on the size of the geyser, had fallen short of its target of one-million subsidised installations by 2014, with only 417 000 installed as at September 30, 2014.
Several factors had slowed the deployment of SWHs, including Eskom’s lengthy procurement process; a misalignment with the targeted electricity demand reductions, owing to focus having been placed on SWH installations in low electricity consumption areas; and unreliable verification of the number and location of installed systems, owing to a lack of systematic reporting and independent verification.
Further, poor quality installations, a lack of maintenance obligations by the suppliers and poor workmanship, which resulted in SWHs being dysfunctional, also contributed to the challenges faced by the ambitious programme.
Eskom’s handover, in addition to the local content requirements implemented by the Department of Trade and Industry, had further stalled the programme, with stakeholders publicly raising the alarm on the impact of the disruption, short notice and potential transitional delays.
However, the DoE, which aimed to leverage the replacement of failed electric geysers to further accelerate the installation of SWH systems, particularly in the high electricity consumption sector, on Thursday announced some of its plans for the programme.
A cap would be placed on the number of subsidies allowed during the transitional phase, while a new rebate scheme was being introduced.
The DoE said a maximum of 5 000 subsidies – at the current Eskom rebate levels, together with the payment services – would be offered, with no further subsidies available under this programme once this cap was exceeded.
“Going forward, a new rebate scheme will be introduced and subsidies will be offered [taking into consideration] local content. A sliding scale commensurate with local content will apply and products with the highest verified local content will attract the highest rebates,” the department said in a statement.
The DoE had also developed a mandatory electronic data collection and verification system, for which training would be offered from February 23.
The electronic record relating to any installation would – at the very minimum – contain a photograph, GPS coordinate, name of product supplier and installer, product size and name of beneficiary.
Further, the department-sponsored South African Bureau of Standards (SABS) verification process, as prescribed under SABS: SATS 1286, had been completed in respect of all product offerings that were submitted to the DoE.
“Only those products that have met the SABS verification requirements will be eligible for receiving subsidies under the social programme,” the DoE pointed out.
The department would provide further information about the registration of product suppliers and installation companies, besides other matters, by March 31.