Eskom rebate : Major shift awaits in 2014/2015
We have seen various changes since the inception of the rebate (money paid to the consumer by ESKOM) since 2008 and the latest change is expected to have quite an impact on the solar water heating industry.
Background regarding the rebate programme:
The aim of the programme is to motivate consumers to lower the pressure on Eskom’s electricity supply, by installing a geyser water heating system which is registered with Eskom and which does not use electricity during peak hours.
The programme also ensured that all systems and ESKOM accredited installers meet the minimum quality standard to protect the customer and the industry. In order for a system to qualify for the ESKOM rebate, it first had to pass SABS testing. The consumer only qualifies for the rebate when an Eskom accredited installer installs a SABS qualifying system at his/her property.
Since 2008, the National Energy Regulator of South Africa (NERSA) allocated funds via ESKOM as an incentive to consumers in the form of a rebate after installing a solar water heater or retro-fitting an electrical geyser with solar. The rebate was relevant to low- and high pressure solar geyser systems. A rebate for heat pumps was also implemented at a later stage.
There were eventually two funders who allocated funds to ESKOM:
- National Energy Regulator of South Africa (NERSA), who funded the rebate programme for Heat pumps;
- Department of Energy (DOE), who funds the rebate programme for solar (water heating).
Short history of Changes:
1 May 2011: The rebate amounts for installing a solar water heater have been reduced for all solar water heating systems due to limited funding at the time. 1
October 2012: The rebate amount was increased for locally produced solar water heating systems (to encourage the uptake and preference for supporting local products). The rebate for imported solar water heating systems remained unchanged.
December 2012: The rebate for low pressure solar water heaters came to an end. January 2014: The rebate for heat pumps came to an end.
The way forward for 2014/2015: Major shift: The following is an extract from a statement issued by:
The Department of Energy (DOE) on Monday, 14 April 2014:
Government’s new procurement model for the Solar Water Heater (SWH) programme:
“Government’s effort to introduce a new procurement model for the SWH programme is at an advanced stage. Government took a decision to stop the subsidization of imported SWH systems in favour of local manufacturing to increase job creation, industrialisation and the socio-economic impact of the programme.
Working with other government departments such as the Departments of Trade and Industry, National Treasury, Higher Education and Training, Public Enterprises and Economic Development, and Eskom, the Industrial Development Corporation and the South African Bureau of Standards (SABS), the Department of Energy announces this revised contracting model as the only basis for accessing government subsidies under the SWH rebate programme.
The Department of Energy has concluded the evaluation of the potential manufacturers of the SWH systems. The list of compliant manufacturers will be announced as soon as the SABS has completed due diligence and independent verification of the manufacturers, which will be in April 2014. Once this is done, the Department, working with Eskom and municipalities will implement the revised 3 contracting model which will include localisation contracting model which will include localisation and skills development. The rollout of the new model will start in the current financial year 2014/15. A stakeholder engagement process will be embarked upon to further elaborate on the revised contracting model for SWH”.
Extract from ESKOM’s website: date: 21 April 2014
‘Eskom hereby informs you that the high pressure solar rebate programme is under review, pending new content requirements as is stated in the SATS 1286. (70% local content requirement). The SABS is busy evaluating local suppliers to see if they qualify in terms of SATS 1286 requirements. The local content verification audit process will be completed by end of April 2014. A new high pressure programme will be launched during the month of May 2014 with suppliers who meet the local content requirements (SATS 1286). From the launch date systems that do not meet the SATS 1286 requirement will not be allowed on the programme’.
Possible effect on the solar water heating industry as a whole:
- This major shift has been communicated to the industry at short notice (20 March 2014) and it will definitely impact importers, local producers and installer companies;
- Extra pressure may be placed on local producers to meet this potential short notice higher demand;
- The availability of high pressure *indirect systems as registered at Eskom is quite low, especially for the Western Cape. Most of the Eskom listed indirect systems are currently imported (or combined with a locally produced geyser). With the new model (to be communicated by Eskom during May 2014) we expect even less availability of these systems qualifying for the rebate. This is a potential limitation for consumers living in frost-prone areas. *Indirect systems are installed in frost-prone areas.
- All of the above (and more) needs long term planning to implement.
Even though we at Solar Juice have been installing locally produced systems (for 99% of our installations since we started the company about 6 years ago) we will also have to wait and see what the outcome is of the audits done by SABS at our local suppliers and the way forward. When we started the company, we decided on using local (designed and manufactured) systems, because the systems are designed with the focus on the South African climate with the added benefit of a lower (transport) carbon footprint and local job creation. The support we receive from our suppliers has been excellent so far.
Until we get feedback from Eskom, the rebate process continues at the current rebate values.
The good news for consumers is that whenever you switch over to a solar water heater or a heat pump, you will:
- lower the electricity consumption of your geyser
- lower your carbon footprint and
- make an excellent capital investment.
Solar Juice is an accredited Eskom installer and a member of Sessa.
Solar Juice services include the installation of:
- solar geyser systems … more info
- heat pumps… more info
- swimming pool heating ….more info
- 750 Watt solar (PV) swimming pool pumps ….more info
As well as the following services:
- Service of existing systems (solar geyser, ITS heat pumps, pool heating) ….…. more info
- Adapt the settings on your geyserwise controller & also show you how to do to it yourself ….
To request a service or quote from Solar Juice:
Solar Juice: Service area
Western Cape (Cape Town ,Somerset West, Strand, Gordons Bay, Kleinmond, Stellenbosch, Paarl, Franschhoek, Malmesbury,Piketberg, Montagu, …) Please ask if unsure
Article: Written by Hannetjie Needham (Solar Juice) on 22 April 2014.