Economic benefits of solar water heating systems in South Africa

With Eskom increasing our electricity prices with 25% annually for the next 3 years. The focus is shifting to find other energy sources that are more environmentally friendly and much cheaper.

The fact of the matter is Eskom is increasing its electricity tariffs with 25 % annually. But this doesn't mean that we will be paying 75% more for electricity, rather 95 % more at the end of the third year. (R100 x 125% = R125);(R125 x 125% = R156);(R156 x 125% = R195)

South Africa's marked economic growth in recent years has propelled electricity to peak demand. Unless something is done, the demand will exceed Eskom's ability to supply electricity during these periods. It is vital to have reliable and uninterrupted electricity for the South African economy to grow.

South Africa is among a few countries worldwide that set comprehensive targets for energy efficiency improvements. On average it cost R3.5 million to save 1 MW, compared with the R 10 million it cost to produce 1 MW. The Energy Efficiency Strategy compiled by Demand Side Management (DSM) program for South Africa proposes the following energy efficiency targets:

• A final energy demand reduction of 12 % by 2015
• Along term goal is to save 4255MW over a period of 20 years.

Factors affecting financial return of a Solar Water Heating System

Life of Solar Systems

The expected life of a hot water system depends on many variables including construction quality and materials, water quality, temperature and pressure and system installation and maintenance.

Available Solar radiation

The daily average for each month of solar radiation (MJ/m2) falling on the solar collectors is an important factor determining the systems performance. This depends on latitude, local climate, tilt of the collectors to the horizontal orientation to the equator.

Patterns of usage of hot water

The pattern of usage of hot water affects the efficiency of the solar collectors and therefore the boosting energy required to provide sufficient hot water. This in turn affects the operating costs. For example, reheating over-night with auxiliary electric heaters can potentially reduce the efficiency of the solar collectors the next day if this hot water is not used before the collectors started heating.

Effect of tariffs

The structure and cost of tariffs for boosting energy from electricity can affect the cost-effectiveness of solar water systems. When high solar fractions (e.g. greater that 80%) are achieved, the use of off-peak electricity tariffs with fixed monthly charges can reduce the cost savings, as minimum fixed monthly charge may be incurred each month.

Governmental rebates

Governmental rebates are an incentive that encourages people to convert to solar. The rebates in most cases are in the form of monetary once off payment towards the capital cost of the solar system. It must be noted that to qualify for the relevant rebates certain terms and conditions have t0 be adhered too.