State-owned power utility Eskom is confident that an effective doubling of the subsidy levels for its solar water heater (SWH) rebate programme, coupled with the anticipated increases in electricity prices over the next three years, would lead to a bigger uptake of this technology by the South African public, spokesperson Andrew Etzinger said on Wednesday.

The utility this week announced to SWH suppliers that it would be increasing the rebates for purchasers of systems that were registered under Eskom’s SWH programme.

Etzinger explained that while the level of subsidies were different for different SWH systems, depending on their size and efficiency, the increases were in the order of double the previous subsidies.

This meant that the average subsidy of R3 000 a system previously, would now be moved up to about R6 000 a system, Etzinger said.

SWH supplier Selected Energy welcomed Eskom’s announcement, with MD Jim Hickey saying that this was a confidence booster to all industry players.

"In the solar water heating industry, we know larger rebates to be the most effective way of improving the uptake of solar water heaters in South Africa. We believe that this step will go a long way in relieving some of the supply pressures Eskom has been experiencing," he commented.

Hickey added that the increased rebate, along with Eskom’s proposed electricity tariff increases, would result in the payback period for a family of four to be significantly less than five years.

“Our improved scheme, which will provide purchasing assistance for systems supplied by Eskom-approved suppliers accredited by the SABS, will offer more South Africans access to solar water heating. This could result in an increased number of households having their energy costs being cut by between 30% and 50%,” Eskom Renewable Energy portfolio manager Cedric Worthmann commented.

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.

While the increases came into effect on January 11, Eskom was still planning to publish both the old and new incentives on its website at www.eskom.co.za/dsm.

Etzinger said that Eskom was hoping that it could now accelerate the roll-out of SWHs in South Africa.

The old incentives had resulted in the installation of about 700 units in the first year of the SWH rebate programme, and a further 1 600 units in the second year.

However, the plan was to “exponentially accelerate” the programme so that it, along with other SWH programmes, could contribute more to the country’s overall strategy of rolling out one-million SWHs over five years.

Etzinger noted that when the rebate programme was started two years ago, there were only a small number of equipment suppliers and installers in the country.

There has since been a dramatic increase in the number of suppliers, as well as in the quality of SWH systems, he added, noting that a lot has been done to promote the industry.

Further, Etzinger noted that the utility was working with government to also finalise a number of other SWH initiatives.

Eskom was confident that this multipronged approach would start delivering “meaningful numbers” in future, said Etzinger.

The expected contribution of the SWH rebate programme, as well as the contribution of the other SWH initiatives, to government’s overall one-million SWH roll-out plan, still had to be finalised, he added.