4.

Solar water heater

implementation

4.1 The case

Residential solar water heaters
The residential sector in South Africa consumes 17% of the
country’s electricity. The largest electricity consuming appliance Most Solar Water Heaters are
fitted with an electrical element
in our houses is usually the electric geyser. It makes up typically
for those cold overcast days when
30% of the total electricity used in many households which the sun can’t do its job properly!
translates to around 5% of the country’s energy consumption. A
solar water heater may reduce this energy consumption figure by
more than half.

From a city and national perspective this reduction will have the following benefits:

● The reduction in residential power use will improve the energy security of a city as it needs
to draw down less power from the grid supply.

● The reduction in demand (during peak times in particular) from the residential sector means
that fewer power stations need to be planned for in the future. Eskom has recognized that
solar water heaters will play a major role in its demand side management (DSM) pro-
gramme.

● Jobs will be created in the solar water heater industry – both in manufacturing and system
installation. Employment creation is a huge national and city priority.

Comparison of all generation technologies:

Photo: Sustainable Living Projects

gross direct jobs/TWh-equivalent

20000 16318
direct jobs

15000
8733
10000
3778
5000 952 1341
80 130 700
0
ol
r

el
Ts

as

H
al
s
ea

an
ga

s
SW
co

og
E

ie
cl

th
R

od
nu

Bi

oe

Bi
Bi

technology

Source: Employment potential of Renewable Energy in SA (2003)

Simple installation and robust technology,
Job creation potential from solar water heaters is significant along with obvious economic, environmental
and social benefits makes solar water heaters
a viable option for mass rollout

12 How to Implement Renewable Energy and Energy Efficiency Options

 ● As water is heated mostly by the sun, a solar water heater will reduce a city’s CO2 emissions
by about 2.6 tons per household per year (Eskom).

For households, a solar water heater (SWH) also has several benefits:

● Water heating costs for a mid- Cumulative Savings from the Installation of a Solar Water
high income household can be Heater (unsubsidised)
reduced by some 60% with a R 30,000.00
SWH. This amounts to about a R 25,000.00
25 to 30% saving on an average R 20,000.00
R 15,000.00
monthly electricity bill. With the
R 10,000.00
price of electricity projected to R 5,000.00
increase sharply in the next few R 0.00
years, this adds up to a lot of R -5,000.00 1 2 3 4 5 6 7 8 9 10
money saved over time. R -10,000.00
R -15,000.00
R -20,000.00
● From an environmental perspec-
Years
tive, water will be heated mostly
Loan Repayments Electricity Saved Cumulative Savings
by the sun reducing a house-
hold’s CO2 emissions by about
Savings in electricity costs can be used to offset the additional
2.6 tons per year (Eskom). A cost of a SWH. Depending on the system used and the amount
useful comparison is if an aver- of hot water required by a household, studies show that a SWH
age family car drives 7800km, it will pay for itself in electricity saved over a 4 – 8 year period.
will produce the same amount of After that, all savings from the SWH will be cash in the pocket
for the homeowner.
CO2.

● Improved quality of life and a reduction in electricity costs can be expected in a low income
household, where energy costs are often a large component of household expenditure and
the SWH may replace the use of “dirtier” fuels, such as paraffin, for water heating.

Commercial and industrial use of SWHs

Solar water heaters can be used effectively in
several commercial applications (eg hotels), as
well as in hospitals, clinics and old age homes.
Although the hot water demands here may be
higher than residential, the increased roof area
of these buildings allows for more collectors to
be installed. Efficiency figures comparable to
those of the residential sector can be achieved.
Photo: Suntank

Solar water heaters are not suited to replace

boilers and other high temperature water appa-
ratus in industry. However they can be used for
preheating purposes, so that at least a percent-
age of the heating operation draws on solar,
rather than carbon-based, energy.

How to Implement Renewable Energy and Energy Efficiency Options 13

4.2 What is a solar water heater?*
A solar water heater uses energy from the sun to heat water. A solar water heater works on two ba-
sic principles. Firstly when water gets hot it rises due to density differences between hot and cold
water (thermosiphon effect) and secondly that black objects absorb heat.

A solar water heater comprises three main parts: the collector, the storage tank and an energy trans-
fer fluid.

Solar water heaters are classified as either active or passive and direct or indirect systems. They may
make use of either flat plate collectors or evacuated tubes. Below the differences are briefly dis-
cussed.

Storage Tank
Photo: Solar Heat Exchangers

Photo: Solar Heat Exchangers

Collector

Heat Transfer fluid

Active vs passive

Active: Uses a pump to circulate the fluid/water between the collector and the storage tank.
Passive: Uses natural convection (thermosiphon) to circulate the fluid/water between the collector
and the storage tank.

Direct vs indirect (open-circuit)

Direct: The collector heats the water directly and the water then circulates between the collector
and the storage tank. A direct system can only be used in areas which are frost and lime
free, without treated or borehole water.
Indirect: The water is stored in the storage tank, and is heated by a heat transfer fluid. This is
heated in the collector and flows around a jacket which surrounds the tank and thereby
heats the water. An indirect system can be used in all conditions.

*
Much of this information was drawn from the Solar Heat Specialist Handbook

14 How to Implement Renewable Energy and Energy Efficiency Options

Flat-plate vs evacuated tube
Flat-plate collectors: The main components of a flat plate collector are a transparent front cover,
collector housing, and an absorber. This technology has been used for over 50 years by manufactur-
ers and has a well established track record of reliability performance.

Evacuated-tube collectors: This comprises a closed glass tube, inside which is a metal absorber sheet
with a heat pipe in the middle, containing the heat transfer fluid. Evacuated tubes are a newer
technology manufactured mostly in China. Generally evacuated tubes have exceptional performance
but have not yet had time to establish a track record of reliability.
Photo: Solar Heat Exchangers

Photo: New Energy

Technologies

Flat-plate collectors Evacuated tube collectors

Installation methods
Close coupled system: This is the most energy efficient and most commonly used installation. It
consists of a roof-mounted solar collector, combined with a horizontally-mounted storage tank
which is located immediately above the collector.
Photo: Solar Heat Exchangers

Close coupled system

How to Implement Renewable Energy and Energy Efficiency Options 15

Split coupled systems: These refer to systems where the water storage tank is situated elsewhere –
usually within the roof. Where the tank can be installed above the collectors a passive systems can
be used (using thermosyphon to circulate water), where not, a pump (active system) would need to
be installed to circulate water through the collectors.

Source: Sustainable Living Projects

Storage Tank
(under roof
but above
panels)

Collector

Split Coupled System (active) Split Coupled System (passive)

Water is pumped from the storage tank, through
the collector and back again. Pump rate is usually
controlled electronically.

4.3 Potential for rollout

How much energy, carbon and peak demand power would be saved if 15 of SA’s major cities had
solar water heaters installed today?

10% Carbon 50% Carbon 100% Carbon

penetration of reduction penetration of reduction penetration of reduction
SWHs potential SWHs potential SWHs potential
(thousands of Peak demand Energy saving (thousand tons (thousands of Peak demand Energy saving (thousand tons (thousands of Peak demand Energy saving (thousand tons
systems) reduction (MW) (GWh/yr) CO2/yr) systems) reduction (MW) (GWh/yr) CO2/yr) systems) reduction (MW) (GWh/yr) CO2/yr)

Buffalo City 19 12 42 50 96 60 210 248 191 119 420 497

Cape Town 76 48 167 198 380 238 836 988 760 475 1,672 1,976
Johannesburg 105 66 231 273 525 328 1,155 1,365 1,050 656 2,310 2,730
Tshwane 56 35 124 146 282 176 619 732 563 352 1,239 1,464
Ekurhuleni 75 47 164 194 373 233 820 969 745 466 1,639 1,937
eThekwini 79 49 173 205 394 246 866 1,023 787 492 1,731 2,046
King Sebata 9 6 20 23 45 28 98 116 89 56 196 231
Mangaung 19 12 41 48 93 58 204 241 185 116 407 481
Msunduzi 13 8 29 34 65 41 143 169 130 81 286 338
Nelon Mandela 26 16 57 68 131 82 287 339 261 163 574 679
Potchefstroom 3 2 7 8 16 10 35 42 32 20 70 83
Saldanha Bay 2 1 4 5 9 6 20 23 18 11 40 47
Sedibeng 23 14 50 59 114 71 250 295 227 142 499 590
Sol Plaatje 5 3 10 12 24 15 52 61 47 29 103 122
uMhlatuze 7 4 15 17 34 21 74 87 67 42 147 174
ALL CITIES 515 322 1,133 1,340 2,576 1,610 5,667 6,698 5,152 3,220 11,334 13,395

Assumptions (from Eskom DSM estimates):

Peak demand reduction (after diversity) 0.625 kW/household
Energy savings: 2200 kWh / system / year
Tons CO2 saved per system: 2.6 tons/yr

16 How to Implement Renewable Energy and Energy Efficiency Options

There is huge potential for a mass rollout of solar water heat-
ers in cities around South Africa. This is demonstrated within To see the complete set of outputs
modeling done for five South African cities using LEAP energy from LEAP for all the cities mod-
modeling software (See section: ‘Using this manual’). This ex- eled, visit the Sustainable Energy
plored a business-as-usual (no SWHs) scenario and a SWH in- for Cities website at
www.sustainable.org.za/cities
stallation intervention scenario.

The impact of a large SWH programme in a city: the case of

Tshwane
In their Energy Strategy of 2006,
the City of Tshwane set targets
Cumulative Energy Savings from the Installation of Solar Water Heaters-Tshwane
for household penetration of so- Scenario: 10% installed by 2010, 50% installed by 2020 Residential

lar water heaters of: 5,000

4,800
4,600
4,400

● 10% by 2010 4,200

4,000
3,800
● 50% by 2020.
Cumulative Thousand Megawatt-Hours

3,600
3,400
3,200
3,000
These targets are similar to those 2,800
2,600

adopted by other cities in South 2,400

2,200

Africa. Incorporating these fig- 2,000

1,800

ures into LEAP, the following re- 1,600

1,400

sults arose: 1,200

1,000
800
600
400
Ž Energy savings 200
0
Achieving SWH targets in 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024

Tshwane will result in a cumula-

tive saving of 5 million MWh of
electricity by 2024. In power sta- Cumulative CO2 Savings from the Installation of Solar Water Heaters-Tshwane
tion capacity terms it will create Scenario: 10% installed by 2010, 50% installed by 2020 Residential
5,000
a 350MW peak power reduction 4,800
4,600
(10% of ESKOM’s biggest power 4,400
4,200
station’s capacity) in 2024. 4,000
3,800
3,600
Cumulative Million Kilogrammes

3,400

Ž Carbon savings 3,200

3,000
2,800
If the city achieves its targets, 2,600
2,400
nearly 5 billion kilograms of CO2 2,200
2,000
will have been saved by 2024. 1,800
1,600
1,400
1,200

Ž Financial analysis 1,000

800

Considering rollout from a pro- 600

400

ject perspective using the same 200

0
2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
targets, two separate projects
were considered based on differ-
ent housing income categories:

How to Implement Renewable Energy and Energy Efficiency Options 17

Project 1: Rolling out SWHs amongst medium to high income households

Due to the high use of electricity for water heating in this income group, a SWH rollout will work
financially as the system will begin to pay for itself over a short period of time.

SWH cumulative cashflow to achieve 50% installation Net Present Value (10%
in med-hi income houses by 2020 -Tshwane discount rate):
(unsubsidised) 5yrs: R27,237,517
10yrs: R117,706,744
20yrs: R716,574,919
R 8,000,000,000 Electricity savings
R 6,000,000,000 Loan Repayments
Total Savings
R 4,000,000,000

R 2,000,000,000
This graph shows the
R0 total project financial vi-
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
R -2,000,000,000 ability

R -4,000,000,000

Assumptions: Systems cost R10000 paid back over 10yrs @12% p.a., electricity price increase of
5% p.a., SWH price increase of 5% p.a.

Project 2: Rolling out SWHs to low income houses

Here the project does not look viable due to the relatively low use of electricity and other fuels for
water heating purposes.

SWH cumulative cashflow to achieve 50% installation Net Present Value

in low income houses by 2020 -Tshwane (10% discount rate):
(unsubsidised) 5yrs: R63,444,581
10yrs: R173,013,159
20yrs: R222,425,170
Electricity savings
R 3,000,000,000 Loan Repayments
R 2,000,000,000 Remember that this graph
Total Savings
R 1,000,000,000 shows total project financial
R0 viability – as opposed to the
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024

R -1,000,000,000 single residence graph shown

R -2,000,000,000 earlier.
R -3,000,000,000
R -4,000,000,000

Assumptions: System cost R6000 paid back over 10yrs @12% p.a., electricity price increase of
5% p.a., SWH price increase of 5% p.a.

18 How to Implement Renewable Energy and Energy Efficiency Options

However, if this low-income SWH project received a 50% subsidy it would be financially viable:

SWH cumulative cashflow to achieve 50% installation Net Present Value

in low income houses by 2020 -Tshwane (50% (10% discount rate):
subsidy) 5yrs: R736,894
10yrs: R7,348,642
20yrs: R187, 283,785
Electricity savings
R 3,000,000,000 Loan Repayments
R 2,000,000,000 Total Savings

R 1,000,000,000

R0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
R -1,000,000,000

R -2,000,000,000

Assumptions: System cost R3000 (subsidized) + R3000 paid back over 10yrs @12% p.a., elec-
tricity price increase of 5% p.a., SWH price increase of 5% p.a.

It should be noted that good quality, small (55litre) solar water heaters are available for around
R3000 fully installed. The graph above shows that if these systems were installed instead of the lar-
ger and more expensive ones modeled, the rollout would be financially viable, even without being
subsidized.

Solar water heaters: viable in low income households?

Conventional assessments indicate that SWHs are
not financially viable in these households, largely
because they do not spend enough money on energy
for water heating. The saving from using solar en-
ergy for this purpose would not repay the cost of the
SWH, even with very attractive financing terms.

However, some experience indicates that the poten-

tial for SWH adoption in this income sector is eco-
nomically much more beneficial and viable than cur-
rently held. Consider the following factors and ex-
ternal costs for such households, cities and state:

● Negative safety and health impacts and costs of water heating using dangerous and dirty fuels
such as paraffin.
● Increased affordability of SWHs as incomes rise and economies of scale bring SWH costs down.
● Opportunity cost of time for a person to heat water using more ‘traditional’ fuels, such as wood.
● Potential for peak load reduction, and avoiding network capacity constraint that accompanies
the common use of kettles for water heating in low income houses.
● Likely Eskom subsidy for SWHs is expected to improve their affordability significantly.
From a simple economic as well as welfare point of view, therefore, it seems that SWHs in the low
income sector should remain a strong focus, and innovative solutions to rollout should be further
explored.

How to Implement Renewable Energy and Energy Efficiency Options 19

4.4 Barriers to implementation
South Africa has one of the highest insolation (hours of sunshine) rates in the world. Despite this
less than 1% of households across the country have solar water heaters – a great contrast to a coun-
try such as Israel, which has installation rates of 60%.

Various barriers have hindered the full-scale implementation of solar water heaters. These include:

Financing/low electricity prices: South Africa has one of the lowest electricity prices in the world.
This means that the SWH system payback period is longer than most households are prepared to
consider. In addition, systems are expensive, partly because the industry is still a relatively small
one, and economies of scale are not realised.

Standards: The standards for SWH’s have until recent years been voluntary and will remain so in
the next few years. However projects and clients can enforce compliance with South African Na-
tional Standard (SANS) 1307 which will regulate the quality of systems. In 2007 the South African
Bureau of Standards (SABS) purchased a SWH test rig which can accurately test systems against
SANS 1307, and manufacturers are becoming compliant against with standard.

Trained plumbers and installers: There is a lack of trained plumbers and installers who are qualified
to install solar water heaters in South Africa, particularly if there is going to be a radical growth in
the market over the next few years. The Central Energy Fund (CEF) has launched training programs
through various training providers and a registered qualification through the South African qualifi-
cation authority exists.

Awareness: There is a lack of general awareness of the benefits of solar water heaters.

Long term support from government: There are currently no subsidy or incentive schemes to entice
consumers to purchase a solar water heater (although a significant subsidy from the Eskom DSM
fund seems likely).

4.5 How to go about implementation

Solar water heaters are a truly sustainable solution to water heat-
ing. The benefits for the country and individual users are clear.
They are a particularly important way to reduce middle to high
income electricity consumption and to provide low income houses
with a better quality of life. Some initial mechanisms and incen-
tives to facilitate mass implementation and ‘kick start’ the market
are outlined below.

Solar water heater bylaw

Considering a bylaw?
bylaw?
A city bylaw can enforce the installation of solar water heaters in, SEA has a SEED Update de-
veloped to support your city
for example,
in implementing a SWH by-
i) all new buildings built in the city
law. Copies obtainable from
ii) all additions to existing buildings in the city where Sustainable Energy Africa:
extra water heating will be required. 021 702 3622
iii) all existing buildings (retrofit) info@sustainable.org.za.

20 How to Implement Renewable Energy and Energy Efficiency Options

This is a potentially very effective mechanism to drive implementation and stimulate the solar water
heater industry. In order to allow for initial supply capacity deficits, a tiered introduction process
can be adopted to ensure the industry keeps up with the new growth in demand. For example for
the first year of the bylaw, only new houses or additions exceeding R1,000,000 in value need to in-
stall SWH, then the following year all new houses and additions exceeding R750,000 need to install
SWH, and so on.

A bylaw does hold particular challenges for a city:

i) Building inspectors will need additional training so that they can approve installations
and enforce the law correctly.
ii) The tiered method of introduction should be carefully considered in order to make the
bylaw practicable.

City of Cape Town the first SA city to embark

on Solar Water Heater Bylaw process

Cape Town is currently in the process of imple-

menting a solar water heater bylaw. The drafting
of the bylaw was initiated under the City’s Energy
and Climate Change Strategy. The bylaw is cur-
rently going through the stakeholder awareness
process, and should be ready for submission to
council by mid 2007.

To find out more about the Cape Town by-law go

to www.sustainable.org.za and click on the ‘Solar
Water Heaters and Cape Town Bylaw’ tab.

Fee for service mechanism

The idea behind this mechanism is that people buy a service, in this case hot water, from an energy
services company (ESCO), rather than energy to perform the service (e.g. purchasing electricity so it
can be used to heat water). The ESCO buys and installs the solar water heater(s) at their own cost.
They retain ownership. They can then sell the hot water to the owner / business in the following
ways:
i) metering the hot water / volume
ii) a lease or hire/purchase agreement over a fixed period for the SWH equipment
iii) a fixed monthly tariff - which is ideally comparable to the monthly electricity saving
from a solar water heater

This mechanism is attractive because the hot water user (house/ hospital etc) bears no capital costs
and doesn’t worry about the maintenance of the system. Although in the long run users will pay
more than if they bought and installed a system themselves, this mechanism works well as it avoids
prohibitive capital costs and is relatively ‘hassle free’ (no maintenance, repair, responsibility etc).

This provides a useful mechanism for cities to consider implementing within their own facilities
(council housing schemes, public facilities, large buildings, etc). Within the residential or commer-
cial sector cities could play a role in supporting fee for service mechanisms through administering
and collecting the monthly tariff (service fee) on the ESCO’s behalf, through their established rates
collection process.

How to Implement Renewable Energy and Energy Efficiency Options 21

Fee-for-service mechanisms are being used within large institutions, such as flats and retirement
homes. Their application within low cost housing schemes is being explored and institutional and
financial models that will have important applications for city housing delivery and under develop-
ment.

Note: The
CDM Finances and Big financiers (eg DBSA) ESCO could be
grants/subsidies a private firm
contracted by
city, or a city
owned SWH
Repayments Loans utility

Supply and install Contract

SWH suppliers equipment Energy Service City / local
and installers Companies government
Agreement Revenue

Agreement Install SWH Revenue collection

eg via rates,
electricity bills

Houses

Solar Water Heating Energy Service Company (ESCO) Model

The Nelson Mandela Bay Metropolitan Renewable Energy Project

NMBM, through their Electricity and Energy Business Unit, are pioneering a renewable, clean and
energy efficiency project in which the private sector will provide the relevant ‘services’, supported
by the municipality. A call for renewable, clean and energy efficiency projects was put out by the
NMBM in February 2006 and three bids offering a range of wind, solar, DSM, cogeneration and
landfill gas technologies were accepted.

The Metro will support these projects on two levels. They will provide financial support through the
negotiation of pricing structures that will ensure the projects’ financial viability. They will also pro-
vide administrative support, such as the inclusion of relevant projects within the municipal billing
system.

The basic premise underlying the model is that the Metro will not incur any costs other than the
purchase of ‘green’ electricity (at a premium). It will make use of supplementary finance mecha-
nisms available to green energy, to offset the cost of this electricity and in so doing reduce the price
differential between renewable energy and Eskom grid electricity.

22 How to Implement Renewable Energy and Energy Efficiency Options

Tradeable Renewable Energy Certificates (TRECs)
TRECs (Tradable Renewable Energy Certificate System) have been
traded since 2002 in South Africa. It is currently working well in
Looking for more info on
Europe, parts of America and Australia. When completely opera-
TRECs in SA?
tional in South Africa, the TREC system may provide a useful Go to www.dme.gov.za
mechanism to subsidise the capital cost of installing a solar water
heater. The sale of TRECs generated over the lifetime of a solar wa-
ter heater can cover roughly 15% of the SWH’s capital cost.

Once the system is up and running, a TREC can be issued to anyone who displaces 1MWh of con-
ventionally generated ‘dirty’ grid electricity (e.g. through installing solar water heaters) or anyone
who generates 1MW-hr of ‘clean’ electricity (e.g. a wind farm). This certificate can then be sold on
the open market to individuals or businesses who want to ‘green’ their electricity consumption.

“Incentivising” SWH installation: the Australian REC system

The government of Australia supports renewable energy by offering rebates to households who
install solar water heaters. In addition to the rebate, households are also eligible for up to $900
through renewable energy certificate (REC) sales. A REC is the equivalent of 1 MWh of energy.

The number of REC’s a consumer receives is calculated as displaced energy over 10 years, based
on the daily sunlight hours and system efficiency.

Through adopting this simple demand pull system the return on investment for the end user has
dramatically increased, and demand has grown, assisting government towards reaching their
mandatory renewable energy target. For more information please visit:

http://www.bcse.org.au/default.asp?id=289
http://www.orer.gov.au/publications/mret-overview.html
http://www.orer.gov.au/recs/index.html

What about Solar Water Heaters in informal housing?

It is often feasible to provide electricity to informal settle-

ments, but there are no widely available solar water heat-
ing solutions for these houses at present. Informal
houses have little or no plumbing, which means that con-
ventional solar water heating systems are not applicable.
However simple, cost effective ideas such as coiled rub-
ber tubing on the roof or even black buckets could work.

How to Implement Renewable Energy and Energy Efficiency Options 23

Utility subsidies
Eskom has recently committed itself to promoting the use of solar water heaters as an element of its
demand side management (DSM) programme. Eskom looks likely to implement a significant sub-
sidy to support large scale SWH implementation in South Africa. Depending on the level of the sub-
sidy, it will make the purchase of solar water heaters even more attractive to medium to high in-
come groups, and is likely to make them financially viable for use by low income groups as well.
The subsidy will most likely occur on the manufacturer and supplier side, in order to allow financial
and quality control.

Using the Cleaner Development Mechanism (CDM)

Up until November 2005, only individual projects could register as CDM projects. For small carbon
saving projects, the net carbon revenue (after taking off transaction costs) is very small, due to the
costs of designing the project, taking it through the CDM process and the sales transaction costs for
a small carbon credit volume. In response to this problem a new type of CDM, Programmatic CDM,
has been established enabling the pooling and crediting of all
emission reductions occurring under a programme of similar For more details on a programmatic
projects. This significantly increases the volume of credits approach to CDM visit
generated, hence tapping into economies of scale. However, www.southsouthnorth.org
work in this area is still proceeding and the mechanism is not
yet readily available to cities.

4.6 Case studies

Case study: SWH implementa-
tion in low-income households -
the Lwandle solar water heater
project

The Lwandle hostel, host to the largest SWH

installation initiative to date in South Africa, lies
tucked away in Lwandle township in Somerset
West, within the Western Cape. The hostel,
owned by the Helderberg Municipality origi-
nally served as a single men’s accommodation
for the Gants food and canning factory.
Through an extensive community participation
process motivated by the closure of the Gants
factory in the late 1980s, the community an-
nounced their primary needs as being jobs, pri-
vacy, toilets and hot water.

The community development project which en-

sued worked towards meeting the needs of the
community and came to be known as the
Lwandle Hostel to Homes Rental Project. The
hostel was converted into family units with

24 How to Implement Renewable Energy and Energy Efficiency Options

some provision for singles, giving rise to 967 units owned by the local authority and available for
rental from R114-R172.

In terms of satisfying the community need for hot water, 305 SWHs were installed (without electric-
ity back-up) to provide hot water. Provision of SWHs was made possible through the local authority
securing a low interest loan from the Development Bank of Southern Africa. Residents paid a fixed
rate for hot water as a way of servicing the loan. The SWHs are mounted on stands on the existing
rooftops in order to receive the best orientation (north) for the heating of the panels.

Initially the community expressed a high level of satisfaction with the hot water service. A survey
conducted in 2003 found residents continuing to use the SWHs, but complained of heaters not heat-
ing water sufficiently over the cold rainy winter months of the Cape. Systematic maintenance did
not seem to be taking place either.

The SWH systems are now owned by the City of Cape Town, and residents/tenants continue to pay
a fixed monthly rental fee (the monthly rental fee increased from R17.50 to R23 by 2003) included
in their monthly rent to cover the repayments on the capital cost of the SWHs. As regards the cur-
rent situation, little is known, except for anecdotal evidence of some systems being broken or in
need of maintenance. Momentum around this project has ceased and the City of Cape Town should
be encouraged to assess the current status and develop a plan to take project forward to a more sus-
tainable situation.

Case study: Facilitating solar water heating in cities through

commercial installation in new, private developments and fee for
service models
An increasing number of companies are emerging in
the area of solar water heating with a range of inno-
vative approaches and products. These ‘products’
provide opportunities for cities to adopt solar water
Photo: Trevor van der Vyver

heating within their own buildings (residential and

public institutional facilities) without incurring up-
front capital costs. Cities may also be able to pro-
mote widespread use of such mechanism through
providing administrative support in the form of
monthly tariff collection through city rates tariff sys-
tems. Cities might also prompt new, private housing
development to include solar water heating through
encouraging this in development approval applica-
tion processes.
Photo: Trevor van der Vyver

Solar water heater installation in new

housing development
A new housing estate development in Randburg, Jo-
hannesburg included solar water heaters in the hous-
ing development. It considered this to be an impor-
tant basis for responsible development in addition to
providing energy savings for prospective homeown-
ers. Additional bond repayment cost is negligible and
the energy saving exceeded the cost of the SWH. The

How to Implement Renewable Energy and Energy Efficiency Options 25

housing development, consisting of 52 two bedroom units, targets new, small, mid-income families.
Units were fitted with 190 litre evacuated tube systems (without electricity backup). The SWH’s are
used as pre-heaters for conventional 230volt 150 litre geysers.

● Typical electricity savings per unit is 93 600 kWh per year.

● Typical carbon dioxide emissions avoided are 103 tons per year.
● Typical water savings from avoided electricity generation is 117 936 litres.

Case study: Commercial scale SWH installation at a retirement

centre through a fee-for-service arrangement
Power cuts resulting in increased dissatisfaction among tenants led a private retirement centre in
Pretoria to convert its water heating system from a conventional electric system to a solar heating
system with an electric back-up, in 2005. The retirement centre is home to 100 residents. The solar
water heating system has been fitted by an energy services company. The retirement centre leases
the system and only pays for the energy consumed during the month. 90 solar panels with a collec-
tor surface area of 120m2 were installed with a maximum demand control unit built into the circu-
lation unit. The storage capacity of the system is 9000 litres. The system uses a forced pump circula-
tion, and has a differential thermostat control together with antifreeze protection. The savings ac-
crued are:

● Energy savings (90 panels) = 197.1MWh per year

● Financial Savings: R56,000 - R60,000 per year
● Environmental Saving: 18tons of coal, 90 tons annual CO2 emissions avoided
Photo: Solar Beam

Photo: Suntank

Photo: Suntank

Large scale solar water heating on mid- Solar water heating on retirement centre
high income Durban apartment block

26 How to Implement Renewable Energy and Energy Efficiency Options

4.7 Support organisations
Key role-players to support implementation of Solar Water Heater projects

AGAMA Energy (Pty Ltd) E+Co

Energy services model Business model
AGAMA Energy offers a ‘fee-for-service’ E+Co, a public purpose investment com-
scheme targeted at households with SWHs. pany which finances energy enterprises, has a
This scheme has potential for application in particular focus on the provision of consumer
large city SWH projects. finance for large SWH systems (having identi-
Glynn Morris fied this to be a particular need in the mar-
Tel: 021 701 3364 ket). E+Co can assist cities through offering a
Fax: 021 701 3365 bulk SWH ‘fee for service’ financing facility
Cell: 083 780 9460 and can be approached for financing of bulk
Email: glynn@agama.co.za water heating schemes. E+Co also offers a
Website: www.agama.co.za SWH supplier/industry finance facility.
Mr. Gavin Watson
Department of Minerals and Energy – Renew-
Renew- Investment Officer
able Energy Finance and Subsidy Office Tel: 012 665 3454
(REFSO) Email: gavin.watson@eandco.net
Financial assistance Website: www.eandco.net
REFSO manages renewable energy subsidies
and offers advice to project developers and Energy Development Corporation - Central
other stakeholders on renewable energy fi- Energy Fund (Pty Ltd)
nance and subsidies. This includes informa- Financial and technical assistance
tion on the size of awards, eligibility, proce- The Energy Development Corporation (EDC)
dural requirements, and opportunities for ac- a division of CEF as part of its focus invests in
cessing finance from other sources. renewable energy and alternate energy fields.
REFSO Office The EDC supports energy development
Tel: 012 317 8569 through commercial, developmental and so-
Fax: 012 317 8511 cial projects. Thus EDC is potentially able to
Email: Refso@dme.gov.za assist cities as a promoter, facilitator and de-
veloper of commercially viable SWH projects
Development Bank of Southern Africa (DBSA) through investment.
Debt financing and a limited technical assis- Mark Tanton
tance grant facility EDC – CEF
DBSA is able to support cities through offer- Tel: 011 280 0300
ing a carbon finance facility in association Fax: 011 280 0540
with the World Bank. Email: markt@cef.org.za
DBSA will consider debt financing of commer- Website: www.cef.org.za
cially viable clean energy projects.
DBSA also has a technical assistance facility Energy Service Company (ESCO)
that may support cities to finalise a compo- Technical assistance
nent of their detailed clean energy feasibility A number of private ESCOs are registered in
study. South Africa that are able to assist cities with
Kumesh Naidoo saving energy and improving energy effi-
Programme Manager ciency thereby reducing costs, managing risk
Tel: 011 313 3538 and enhancing a competitive edge.
Email: kumeshn@dbsa.org ESCOs offer this through a package, which
includes a comprehensive energy audit ser-
vice, a financing mechanism, equipment pro-

How to Implement Renewable Energy and Energy Efficiency Options 27