Status of Solar Heating/Cooling and Solar Buildings - 2012

Status of the Market for Solar Thermal Systems

Market Size and Trends

South Africa enjoys 24% of the world's best area for winter sunshine, yielding more than 6,5kWh/m2.d.  However, this is not reflected in the solar thermal market where boom-bust conditions prevail as a result of fickle policies. The main focus of solar thermal applications is on solar water heating (SWH) for the domestic sector, which has shifted from grid connected high-pressure systems to low-pressure systems for free-standing dwelling units inthe lower income sector. This increases the number of installations while the collector area per installation is reduced. 

The most recent scientific market survey of SWH in South Africa was published in 2005. A survey is expected in 2013. From this interpolations should be possible.

Typical Applications and Products

Typically low-pressure systems of 150 litre tanks are being installed on free-standing single family houses of less than 50m2 floor area. Imported vacuum tubes facing any direction are not an unusual sight. This brings some warm water to people who would otherwise have used firewood, coal or paraffin to heat water. The low-income sector is also subsidised with 50kWh free electricity per month.

Main Market Drivers

South Africa has a sunny, semi arid climate, but water is predominantly heated by horizontal electric resistance water heaters placed in the uninsulated roof space and connected with unlagged pipe systems. The annual losses are 29,6%.  In the past, electricity was very reliable and cheap, which was believed to be a competitive advantage. Recently, Eskom announced price increases of 16% per year for five consecutive years, more than doubling electricity costs. This escalation is motivated by the cost of building new coal fired power stations, the rising cost of coal and nuclear as well as network maintenance/upgrading.

A "One Million Solar Water Heater" initiative was announced by the Department of Energy. This would be subsidised by a Demand Side Management Fund levied on electrical consumption. Eskom has been appointed to run the project and the state utility promoted it very well, making several unilateral changes along the way. It is likely that the one million unit target will be reached in 2014-15. It appears that the South African population of more than 50 million as well as the solar industry have high expectations.

New Building Regulations (SANS 10400XA and SANS 204) have been promulgated for new buildings. These prescribe that 50% of domestic hot water must be supplied "by other means than electric resistance heating". Since gas does not play a major role in South African water heating, the new regulations are expected to boost SWH and heat pumps.

Key barriers to solar thermal application are the absence of a consistent and unified solar thermal roadmap for South Africa and its region. Stop-start projects tend to attract fly-by-night operators and weaken the nascent local industry. At least one second-generation local SWH manufacturer had to shut down. Local production is difficult as a result of uncompetitive labour and small, variable markets.

Another barrier is the lack of leadership by example. Few government institutions and even fewer high-ranking officials are seen to practise what they preach. There is a risk that the mistakes of the "Solar Home (PV) Systems" may be repeated, thereby associating inferior SWH with poverty and failure. This leads to the next barrier of lacking awareness and intellectual inertia combined with short-term thinking. All these barriers can readily be overcome with good long-term policies and as well as the will and capacity to implement these.

Industry

The market share of local producers is not known, but is expected to be under pressure of more competitive imports enabled by larger markets, higher labour productivity and supportive policies of the exporting countries. Government initiatives of increasing local content have been started. Well-established importers of good brands are switching to franchise schemes, allowing parallel brands to be marketed along with theirs. Three and two tiered marketing systems are in place.

The replacement market of broken electric geysers is efficient and covered by house insurancers who are working in cooperation with electric geyser installers.

Employment

Creating jobs is a high priority in South Africa, since labour unrest leading to violence, is often due to people who cannot find work.  In 2009 the unemployment rate was as high as 23,5%.

In South Africa solar water heaters create 5,9 direct work places per MW installed. Most of the value creation is downstream in the value chain, after manufacturing.

Coal power generation creates only 1,7 direct work places, and nuclear even less with only 0,5 jobs per MW. In South Africa, solar thermal produces twelve times more decent, safe and permanent work opportunities than nuclear.

Costs

The levellised costs of solar thermal energy compared with other energies is the subject of further studies. The main uncertainties are the future costs of fossil and nuclear-based energies. A further uncertainty is their current and future subsidies. Current VAT is 14%.

Other Key Topics

The SOLTRAIN II initiative (2013-15) is expected to address many of the barriers mentioned earlier, especially because these are being tackled at both national and regional levels. Inputs from people with experience in the EU Solar Thermal Technology Platform are expected to facilitate and guide the country towards finding coherent long-term policies instead of the current situation.

With greater public awareness, it is reasonable to expect that the current way of installing units of arbitrary orientation and poor durability will eventually be phased out. The public and plumbers are likely to be better informed.

Solar cooling - an attractive option in a country with a maximum cooling demand during most intensive sunshine - has not taken off yet. 

Status of the Market for Solar Buildings

Scope

As a result of market development elsewhere (mainly through Feed-in-Tariffs) PV applications in private sector buildings are making progress. A South African Feed-in-Tariff was prepared by the government, but was unilaterally abandoned overnight in favour of a tendering system that favours large companies. Building Integrated PV is not yet well understood by the building profession.

There are no Solar Access Rights for solar installations or buildings. Building energy ratings and appliances ratings have been in discussion for some time.

Government buildings fall under the same energy efficiency regulations as the private sector, but they are not obliged to submit plans for planning approval.

There is a Green Buildings Council of South Africa encouraging market leaders towards greener builders, and "green" is becoming fashionable in woman's and architectural journals as well as in marketing.

PassivHaus and SolarPlus buildings are known from European literature, but are still in the offing.

Daylighting and lighting compensated electric lighting are mostly retrofitted in commercial buildings by specialist energy performance contracting.

Incandescent light bulbs will soon be replaced by CFLs, and LEDs are gaining acceptance. A successful ELI drive was headed by Barry Bredenkamp. These initiatives reduce air-conditioning loads, which are growing as a result of climate change, urban heat islanding and poor design.

Main Market Drivers

The first South African autonomous modern solar house was built in 1974. In South Africa, energy efficient buildings built by the private sector are faster and cheaper to implement than erecting new coal fired or nuclear power stations built with tax money. Buildings also last four times longer. The spectre of rising fossil based energy prices, combined with past and present experience of power outages, is slowly creating effective energy awareness with the private sector, especially industry and mining.

As a result of a history of cheap energy, South Africa's energy intensity is twice the world average.

The main barriers in the building sector is the habitual focus on cost first, combined with the intellectual inertia of professionals.

Employment

The number of solar heating/cooling jobs has not been established. This is a matter of urgency, given the unemployment of the restive youth.

Costs

As a result of the very favourable South African climate, the additional capital cost of solar buildings is smaller than the variance of typical tenders submitted. The public and professionals have a perception that the extra capital cost would be about 15%, which does not agree with facts (Green Buildings Council of SA, 2012). With SANS 10400XA and SANS 204, the capital cost difference between a PassivHaus and a standard building will "disappear in the noise". The new building regulations do not claim to be "Best Practice".

Other Key Topics

Large numbers of single family "starter units" (not "houses") are being built with tax money. These units are not orientated correctly, energy efficient, nor solar. The urban sprawl without public transport creates a permanent structural energy problem that is currently being addressed unsustainably by private taxis. This comes at a high cost of fossil fuels, pollution and commuter time.

The Western Cape Province has launched the "Green Cape" and the "110% GREEN" campaign. Recent figures confirm that there is a decline in energy consumption, despite a population growth in the Western Cape. (Sarah Ward, pers comm 2012-11-22).

R&D Activities

R&D Programmes

There is no national R&D programme for solar thermal and/or solar buildings.

R&D Infrastructure

R&D Institutions
Institution Type of Institution Relevant Research Areas IEA SHC Involvement Website
The Centre for Renewable and Sustainable Energy Studies (CRSES) www.crses.sun.ac.za/
South African National Energy Development Institute (SANEDI) www.sanedi.org.za/
Renewable Energy Centre of Research & Development (RECORD) www.record.org.za/

Support Framework

Background

The South African "White Paper on Renewable Energies (2003) by the Department of Energy is "...setting a target of 10 000GWh (0.8 Mtoe) renewable energy contribution to the final energy consumption by 2013 to be produced mainly from biomass, wind, solar and small scale hydro ...to be used for power generation and... solar water heating and biofuels. This is 4% (1667 MW) of the projected electricity demand for 2013 (41 539MW)." (Dept of Energy 2003:i)

Renewable energy progress is not being monitored nor does renewable energy appear on the records of Stats SA.

The National Energy Regulator of South Africa is busy with a process of Renewable Energy Bids (REBIDs). Implementation is expected to start soon.

Solar thermal energy is not included.

Local governments of Cape Town, Nelson Mandela Bay Municipality, Ekurhuleni and Cosmo city are active in SWH.

The Development Bank of Southern Africa supports RE initiatives, and implemented solar building design in their own buildings at Midrand.

Government Agencies Responsible for Solar Thermal, for Solar Building Activities

The South African Bureau of Standard (SABS) is responsible for formulating industry standards. SABS Commercial does outdoor testing of systems for a fee. This is not subsidised. SABS uses a donated SWH test unit.

Most Important Public Support Measure(s) for Solar Thermal and for Solar Buildings

The New SANS Buildings Regulations are modelled on the Nordic Structure, which allows a choice between the Prescriptive (Deemed-to-satisfy) or the Performance Based compliance method.

The regulations apply to new buildings or substantial renovations/alterations.

  • There are no financial support schemes.

  • The Department of Trade and Industry has mandated the National Regulator of Compulsory Specifications to develop regulations that reduce energy usage in the building sector for new buildings.

  • Training and education is handled by the Tertiary Education Institutions as well as associations like SESSA and IOPSA.

  • Awareness is being created by media coverage of rising energy prices. In addition Eskom runs the Eta Energy Efficiency Awards Competitions since 1985.

Many international development organisations, such as ADA, GIZ, British Council, support renewable energies.

  • In 2009 South Africa spent 0,92% of GDP on R&D, and between 2,5% to over 3% of GDP (1997-2005) on social grants. The bulk of energy related R&D funding went into nuclear work, which was eventually abandoned. The National Research Foundation has a long-term R&D ambition of 4% of GDP. The country has a low rate of research practitioners of 0,61% per thousand. There is a total of 73 A-rated researchers, with the number of reviewed papers remaining static over the last decade.

  • Quality control of installed solar thermal systems is achieved by the appointment of a SESSA Ombudsman.

Information Resources

National Solar Associations (industry and non-industry)

Industry bodies and NGOs like SESSA (www.sessa.org.za), SAWEA (www.sawea.org.za), WWF (www.wwf.org.za), Green Peace (www.greenpeace.org/africa/en/) are advancing the use of solar thermal energies.

National Associations on Green/Solar/Sustainable Buildings

Information sources noted above and the Green Building Council of South Africa (www.gbcsa.org.za/home.php).

Most Important Media for Solar Thermal and Solar Buildings

Journal of Energy in Southern Africa (www.erc.uct.ac.za)