South Africa is struggling to create jobs and reduce the high unemployment rate that is hovering around 25%, according Statistics SA. The government’s energy savings target requires that 10,000GWh of electricity be replaced by energy from renewable sources by this year.
The Department of Energy believes 23% of this target can be achieved through solar water heating, according to an Eskom fact sheet.
Nersa gave Eskom R1.068bn to fund the rebate programme that began in 2008 and was reviewed this year. Home owners were given incentives to replace electric geysers with solar water-heating systems through rebates on the cost of installing the system.
"Relative to other energy efficiency programmes, solar water heating was achieving little demand savings at evening peak, at a high cost," Nersa spokesman Charles Hlebela said. "However, the programme helped to create jobs in the solar water-heating industry."
Other energy efficiency programmes include shower-head replacements, energy-efficient light-emitting diode (LED) lighting, and demand reduction.
Mr Hlebela said job creation was an important goal in the government’s plan to install 1-million solar water heaters by 2015.
Total electricity demand reduction from the programme for the financial year ended March 2012 amounted to only 22MW, and 5MW for the year to March 2011. According to Nersa, this was achieved at a cost of R31m and R45m per megawatt in each year respectively.
Fewer than 200 high-pressure solar water heating units were installed a month at the beginning of the programme, in 2008. This has increased to a peak of more than 6,000 units a month. Low-pressure units were installed in low-cost housing projects.
However, many of the products imported and distributed in South Africa were not backed by sound knowledge about them and were often unsuitable for harsh local conditions, said Carel Ballack, ombudsman at the Sustainable Energy Society of Southern Africa.
Investors in the sector needed to do proper market research and have the technical skills that solar water heating systems required. "The solar water heating industry is turbulent, resulting in fluctuating sales," Mr Ballack said.
Poor management of the rebates also made it difficult for the sector to prosper, despite rising energy prices. A staggering 40% of enterprises that entered this sector attempted to create jobs, but failed, he said.