Eskom generates about 95 percent of the electricity used in South Africa. The company has been battling with electricity shortage since January 2008, but its problems date a decade earlier and are due to lack of investment in new capacities and in updating the existing power stations. Last year, Eskom increased its tariffs by 31 percent and asked for 35 to 45 percent annual increases for three years in order to scrape together about R400 billion needed to build new power plants.
However, in February 2010 the National Energy Regulator of South Africa (Nersa) approved lower increases:
- 24.8 percent for 2010/11 financial year, which will bring the average Eskom electricity price to 41.31c per kWh;
- 25.8 percent for 2011/12, bringing the average Eskom electricity price 51.68 c per kWh; and
- 25.9 percent in 2012/13, making the average Eskom electricity price 65.06c per kWh.
Eskom will use part of the money it gets from the higher rates towards increasing its solar water geyser subsidies, from about R2,500 to about R7,000. The cost of subsidizing solar geysers is lower than the cost of building a new power station. With the new subsidy in place, almost half of the cost of a solar geyser will be covered by Eskom. Eskom introduced solar geyser subsidy in 2008, planning to help convert one million geysers over five years. During the first two years of the programme only 2,000 households had taken up the offer. However, one month after the increase of the subsidy, 762 applications were received. About 40 percent of an average South African household’s electricity bill goes to pay for heating the geyser. With new, bigger subsidies, a household will recover its initial investment within five years, and then go on to use free hot water.
“Our aim is to encourage as many South Africans as possible to move away from electric geysers, and replace them with solar heated systems. We estimate that there are currently about 4.2 million electric geysers in the country and only 76 873 installed solar water heating units.”
Eskom announced to SWH suppliers in January 2010, that it would be increasing the rebates for purchasers of systems that were registered under Eskom’s SWH programme
Eskom’s rebate increase announcement sparked renewed interest in solar water heaters, exactly as the state-owned utility intended. However, many consumers are concerned that the rebate amount is nothing but an empty promise from Eskom.
However, since the rebate system was announced in 2008, Selected Energy has been an active participant in the Eskom DSM (Demand Side Management) programme, which aimed to save some 3 000 MW of electricity by 2012 and up to 8 000 MW by 2025. Over 1 600 rebates have been paid out to Selected Energy customers over the past year and a half.
Some R2-billion has been made available through the DSM programme, which will be managed by financial services firm Deloitte & Touche, over the next five years
The utility’s objective was to replace about 900 000 electrical geysers, including new homes being built, with solar systems, thereby creating an energy saving of 578 MW.
The utility said that the energy savings created by using solar power, rather than electricity, would decrease a consumer’s electricity bill by between 20% and 40%, and being a renewable source would contribute to greater environmental objectives.
“Although the response is lower than we had hoped for, we are still absolutely thrilled at the response from consumers and delighted by the support and commitment of our partners,” said Eskom renewable portfolio manager Cedric Worthmann. He added that the rebate increase of up to 120%, in some cases, was in response to present market conditions, and might not be available for an indefinite period of time. The value of the rebate will be evaluated and decreased according to market drivers and energy costs on an annual basis for the next five years.
So contact us at Yes Solar as soon as possible to get a no-obligation quote and advice as so which system and size to install. Install a Solar Water Heating System while you can still benefit from the rebate system.