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Eskom pulls out of solar water heater rebate programme

By Staff Writer
Eskom has said that it will be handing over the administration of the solar water heater rebate programme to the Department of Energy (DoE). The budget for this programme has been the responsibility of the Department of Energy, however, Eskom has been responsible for implementing the programme until now. The power utility has said that it will only process claims for rebates where the equipment was installed on or before 31 January 2015.
 
Khulu Phasiwe from Eskom said: "The rollout of the solar water heating programme is an initiative of the Department of Energy (DoE) and has been funded by the department since inception. Eskom was simply an implementation agent/partner of the DoE. We are currently in the process of handing back the management of the solar programme, as agreed with DoE."
 
Lance Greyling, DA shadow minister of energy, said: "The DA is very concerned with Eskom's sudden withdrawal from the rebate programme because we are worried about the effect that this might have on the solar water heater industry. We are concerned that the requisite capacity has to be built up in the DoE to be able to manage a rebate programme of this size."
 
According to Greyling, it is institutionally correct for the programme to be taken on by the DoE, however, the decision to do so appears to have been sudden, rather than a gradual shift, where the department could build up the necessary capacity.
 
He said: "Time will tell whether this will have a hugely disruptive effect on the industry, or whether in fact this was the right move. But we certainly are very concerned at this stage that the Department doesn't have the capacity."
 
What is the solar water heater rebate programme?
 
The aim of this programme was to help reduce power consumption. The Eskom website claims that "solar power is one of the most effective renewable energy sources available". Water heating is one of the most power-intensive household actions, and by making use of solar water heaters people are able to reduce their homes' power consumption, helping to reduce strain on the volatile power grid.
 
To-date Eskom has provided rebates on solar water heater installations. Customers paid the full price of installation for their systems, and then claimed the rebate amount back from Eskom. The website states that people "will receive their rebate within eight weeks of receipt of their completed claim".
 
The rebate that a person receives is dependent upon the size of the solar water heater unit installed and the potential electricity consumption saving that it can provide. According to a document on the Eskom website, rebates range from between R3 280 to R8 964 depending on the type of system purchased and installed.
 
The programme so far
 
The government had the aim of installing one million solar water heaters by 2014, which Greyling points out it was not able to achieve. The DoE installed only 417 000, less than half of the original target. Many of the units that were installed were low pressure systems, Greyling says that more emphasis needs to be placed on the high pressure systems as they are the ones that will led to greater reductions on electricity demand.
 
He said: "What I would like to see going forward is a programme that really puts emphasis on the high pressure units so that we can get those demand reductions. And actually then have a rebate programme that starts to address some blockages that have occurred in the past and that prevent higher income communities from actually putting solar water heaters on their roofs."
 
Impact on the industry
 
Lionel Schultz, marketing manager of Kwikot, is concerned about the time that it will take between Eskom handing over the administration of the programme and the DoE restarting the rebate claims process.
 
He said: "There has been no indication when the DoE will actually start administrating, because there will be some sort of lull between the handover. The industry is requesting if they can delay the process of handover, so that people can still have installations done and still claim rebates, but there has been nothing coming forth from Eskom or the DoE."
 
During the Eskom systems update meeting on Thursday, when asked if it would consider delaying the handover, Eskom spokesperson Andrew Etzinger said that the programme was not theirs in the first place, and that Eskom had only been assisting with the administration of the programme.
 
According to Schultz, the gap between Eskom ceasing its administrative duties, and the DoE assuming them will have a negative effect on the suppliers and installation of solar water heater units, as there may be a decrease in the number of people purchasing and installing units, thanks to a fear that the rebate would not apply.
 
Greyling believes that the solar water heater industry should be a booming market in South Africa, however, due to changes in policies and financial issues, this is not the case.
 
He added: "What we really need is a concerted push by government to address some of the problems that have led to households putting solar water heaters on their roofs. We desperately need this because we have to reduce the demand on the grid so as to avoid further load shedding."
 
Justmoney contacted the DoE for comment, but had not had a response at the time of publication.

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