The South African government and Eskom have revised the contracting and funding models for the mass roll-out of solar water heaters (SWHs). In future, the programme will be funded by the taxpayer, rather than the electricity consumer, and will focus heavily on stimulating local manufacture and supporting small and medium-sized installers.

Currently, the deployment is incentivised through a rebate programme, funded from electricity tariffs. This rebate support has facilitated the deployment of 285 000 SWHs, which Eskom claims have delivered power savings equivalent to 46 MW.

But the utility’s Andrew Etzinger reports that changes will be made when the rebate expires at the end of the year.

The objective of installing one-million such geysers by 2014 remains intact. However, the redesigned programme will seek to integrate government’s economic objectives of building a larger-scale domestic SWH manufacturing industry, while also supporting smaller installation and maintenance companies.

A total of R4.7-billion will need to be secured from the National Treasury to meet the target and Etzinger has indicated that the first R1-billion should be transferred to Eskom “shortly”, in line with an agreement between the utility and the Department of Energy (DoE).

“The reason for the change is driven by a new contracting model that places greater emphasis on the local production of SWHs,” he explains, adding that the new approach is supported not only by the DoE, but also the Departments of Trade and Industry and Public Enterprises.

Under the proposed arrangement, Eskom will procure the units from domestic manufacturers and offer these on a “free-issue basis” to installers.

Government and Eskom say the model should provide demand security for manufacturers, while transferring the financial burden from small and medium-sized installers to Eskom.

Tenders have been issued for the supply of the SWHs and Eskom is in the process of evaluating the submissions received. “We will be communicating back to the market soon,” Etzinger says.

Eskom says the SWH roll-out, together with its other residential demand-side interventions, have achieved a saving of 181 MW to date. During the second phase, a savings target of 190 MW has been set.

A range of products have been developed in support of further business, industrial and residential power savings and these will be “aggressively driven” over the coming months and years.