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ENERGY-SOUTH AFRICA: The Poor Fly Under the Solar Water Heating Radar

Gail Jennings* - IPS/IFEJ

CAPE TOWN, Oct 12 2007 (IPS) - Earlier this year, IPS reported that the South African coastal city of Cape Town was debating a "first of a kind" bylaw that would make solar water heating compulsory for relatively costly new buildings, and certain renovations. This got us thinking: what of solar water heating for less expensive structures – especially homes being built under the country&#39s extensive low cost housing programme…Are any initiatives on the drawing board in this regard?

Since coming to power in 1994, the African National Congress government has spearheaded the building of low cost, subsidised houses to overcome the homelessness created by apartheid. However, many of these structures are what is termed "core houses", meaning they lack flooring, geysers and other amenities.

Solar water heaters (SWHs) can be somewhat expensive to install; but this cost is normally recovered within a few years through energy savings that continue long after the units are paid for. The heaters can provide an environmentally friendly source of hot water for low income housing residents, and cut their household water heating bills in the long run – good news all round, surely, especially if financial aid were provided to help people get a foot on the SWH ladder.

Not necessarily, it seems.

Low energy usage

"Generally, people living in low income households don&#39t spend enough money on energy for water heating," Andrew Janisch of Sustainable Energy Africa, a Cape Town-based consultancy, told IPS. "As a result, the saving from using solar energy for this purpose would not repay the upfront cost of the solar water heater, even with attractive financing options."

A solar water heater is made up of a hot water storage tank or geyser, and a roof-mounted panel (called a "collector") that absorbs the sun&#39s energy and uses it to heat the tank water.

The cost of SWHs ranges from about 500 dollars to 2,200 dollars, depending on factors such as the volume of the tank and the square meterage of the collector – and whether a high pressure water flow from the tank is required for bathroom and kitchen equipment.

"It&#39s a tough issue," said a project manager at a Johannesburg-based company that is co-ordinating an initiative offering incentives for the installation of solar water heating systems in several houses for the middle and upper income brackets.

"We used to look at government subsidised houses, but it was just too expensive in the greater scheme of things," the manager told IPS. "Add the cost of a geyser to the 49,000 rand (about 7,000 dollars) per house subsidy, and it would not fit the bill."

"We&#39re still taking our lead from our previous minister of minerals and energy: she directed us not to force technologies onto low income housing," the manager added. "These things must go on the houses in Sandton to create the aspiration among low income households, was her message." (Sandton is a wealthy suburb of Johannesburg, South Africa&#39s financial centre.)

These observations are echoed by Peter Lukey of the chief directorate for air quality management and climate change in South Africa&#39s Department of Environmental Affairs and Tourism.

"We must avoid the &#39ghetto-ification&#39 of renewable energy. Solar should never be seen as second class power," he told IPS.

"In South Africa, we need to take into account our vulnerability to climate change, and focus on where we can make the biggest impact. It is not the poor who are polluting with their energy use – it&#39s middle and upper income households."

As a result, SWH initiatives remain focused on the relatively wealthy, and the downright rich. In the case of low earners, "Either the government must pay, and it&#39s too expensive, or the individual must pay – and it&#39s too expensive," said Lukey.

For its part, the state energy utility, Eskom, is largely focused on securing South Africa&#39s energy supply. Demand for electricity is growing at a brisk 4.5 percent annually, and South Africa has a reserve margin of only some "7.5 percent, which is low by international standards," says Andrew Etzinger, Eskom&#39s general manager for investment strategy.

The company has little incentive to fund the provision of solar water heating to a sector of the population that is not among the country&#39s big energy consumers. "Eskom&#39s primary business is not poverty alleviation, but securing energy supply to its market," noted the project manager at the firm involved with SWH incentives.

Pilot projects

Still, as concerns about global warming mount – and the need grows for countries to use energy sources that don&#39t contribute to greenhouse gas emissions – even low cost housing will probably have to be brought in to the environmentally friendly fold.

Where low cost developments have benefited from solar water heating, it has been largely under pilot projects designed to assist local authorities in reaching renewable energy targets, or because environmental impact assessments have stipulated energy efficient developments.

Cape Town, for example, has set a target of having 10 percent of all households in the city with solar water heaters by 2010 – this in addition to the proposed bylaw.

The Kuyasa Low Income Urban Housing Energy Upgrade Project in Khayelitsha, on the outskirts of Cape Town, is one step towards achieving this.

This city funded project has fitted 10 houses with solar water heaters, insulated ceilings and compact fluorescent light bulbs, resulting in a 40 percent reduction in household energy costs.

Cape Town has also secured an additional 4.35 million dollars from the national Department of Environmental Affairs and Tourism and the Western Cape provincial Department of Housing and Local Government to install solar water heaters at a further 2,300 low cost, subsidised houses. Carbon credits will cover about 15 percent of the expenses for this initiative.

The use of carbon credits occurs in terms of the 1997 Kyoto Protocol to the United Nations Framework Convention on Climate Change, which established various processes to reduce greenhouse gas emissions, including the Clean Development Mechanism (CDM). Under the CDM, industrialised nations can meet targets for greenhouse gas reductions through investing in initiatives that cut emissions in developing states; this enables the issuing of Certified Emission Reductions – also referred to as carbon credits, which can be traded internationally. One credit is equivalent to a tonne of carbon dioxide, a leading greenhouse gas.

Cosmo City, a new housing development in Johannesburg, has also taken steps towards SWH. The project includes 3,000 low cost homes, of which 170 have been fitted with solar water heaters at a cost to the city of some 290,000 dollars.

Manda Mandavha, a project manager in Johannesburg&#39s environmental management department, says the solar water heaters have also been used to raise awareness of climate change among residents.

"We would like to install more, but we do not have the funding," he told IPS.

Further use of carbon credits might, at first glance, seem an ideal way to pull in extra funding. But this idea also stumbles on the fact that energy use by the poor is relatively low – with investment in SWH schemes for low cost houses offering only small reductions in greenhouse gas emissions. In short, other initiatives offer more bang for the carbon credit buck.

Examples elsewhere

Brazil may point the way for introducing solar water heating on a large scale for low cost housing.

Earlier this year, the National Agency for Electrical Energy (Agencia Nacional de Energia Electria, ANEEL), the electricity sector regulator, stipulated that all electricity utilities in this Latin American state should contribute 0.5 percent of their after tax profits to a fund that ANEEL will use to provide solar water heating for low income families. This has increased the number of households with solar water heaters almost ten-fold.

Sustainable Energy Africa is working with three urban authorities in the northern province of Gauteng, South Africa&#39s economic hub, to establish a similar fund.

"Cities are currently facilitating and endorsing solar water heating rollout business plans for their middle and high income installation programmes," explained Janisch.

"Our plan is that in order for companies to receive this endorsement, certain criteria will have to be met. One of these is that a contribution is made towards a pro-poor fund that will subsidise appropriate energy interventions in low income households."

The importance of such schemes notwithstanding, Robin Thomson of Cape Town-based solar water heating company SunPower believes the pool of people who can afford SWHs may be larger than is generally assumed.

The cost of a low pressure 100-litre unit with a geyser can be as low as 29 dollars a month for 24 months – the amount many people spend on mobile phone calls, furniture and the like.

"There&#39s a big difference between low income and no income," Thomson told IPS.

(* This story is part of a series of features on sustainable development by IPS – Inter Press Service – and IFEJ, the International Federation of Environmental Journalists.)