Solar Water Heating
Monday, 10 May 2010 16:21

French helps South Africa with SWH program

The French Development Agency (AFD) is appraising large scale solar water heater (SWH) rollout projects in South Africa that AFD could finance. In order to share experience on such projects and draw lessons that may be used in the context of South Africa, AFD invited key stakeholders to a workshop focused on the successful Tunisian experience (the PROSOL program).

“We are trying to share our experience in Tunisia to help determine the best way to implement the South African program,” says Rafik Missaoui, who designed the programme in Tunisia and gave a presentation of the PROSOL program including a description of the institutional structure, sharing of risks and level of responsibility of the various stakeholders involved.

A solar water heating program in Tunisa allowed the end user to save between 70-80% on energy costs for water heating. Tunisia is the northernmost country in Africa.

“The idea is to establish a sustainable new sector for SWH in South Africa. In order to meet the demand for renewable energy, we need an innovative financial and institutional mechanism,” says Missaoui.

“The financial mechanism is based on two components. The first part is a small subsidy which will come from the Demand Side Management (DSM) subsidy in order to make solar water heaters profitable for the end-user. The second component of the financial mechanism consists of a loan,” said Missaoui, explaining that the loan is intended to be issued over a period of six to seven years in order to make the reimbursement equal to the energy saved by the household, ensuring no additional pressure on the consumer’s expenses.

According to Missaoui, in South Africa, the program could be designed so that the loan is reimbursed through municipalities in order to ensure that loan repayment is easy and cost effective. “The Department of Energy plans to implement SWH programmes and I have been invited by the AFD to share our experience with such programs. We can help South Africa optimise the process, avoid wasting time and advise them on where the pitfalls are in such a program’s implementation,” says Missaoui.

“The AFD is very active in Tunisia. It knows a lot about these types of energy efficiency and renewable energy programs and it is trying to apply the best practice in other countries,” concludes Missaoui.

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The PROSOL Project in Tunisia

Currently AFD is advising South African stakeholders on how the Tunisian PROSOL program can be replicated locally. Tunisia is the northernmost country in Africa bordered by Algeria, Libya and the Mediterranean Sea.

Tunisia enjoys an important level of solar radiation with over 300 sunshine days per year. According to the AFD, the PROSOL program in Tunisia allowed them to save between 70-80% due to energy dedicated to water heating. Based on the energy mix used for water heating in Tunisia (mainly LPG and natural gas), this represents an annual reduction of ca. 0.11 ton of CO2 per installed m² (1 SWH unit = 2.5 m² on average).

The first solar water heating rollout program was launched in 1985, through a local State owned manufactory. The rollout implementation started slowing down after a few years due to insufficient reliability of the equipment and the whole industry progressively lost credibility.

After drawing lessons from the first program, a second program was launched in 1995. The program encompassed several (private) suppliers as well as equipment quality controls. In addition to tax incentives, the success of this program was economically relying, on significant investment subsidies granted by GEF (Global Environment Facility) which equaled 35% of the investment amount. Therefore, the end of the GEF subsidies in 2001 immediately led to a drop in new solar water heating installations.

Declining market led to program launch
It was in a declining solar water heating market that the PROSOL program was launched in 2004. Compared to the previous GEF program, the PROSOL one includes a new important feature namely a credit system, initially in the form of a vendor program and subsequently bank loans. As a result, the residual upfront cost of the solar water heating (after subsidy) is spread over a five year period and paid by the household through its electricity bill, which remains, in most cases, roughly unchanged thanks to the energy savings generated by the equipment. Therefore, from the consumer point of view, the installation of the solar water heating is attractive, being almost free of charge and generating savings over the long run (once the equipment is repaid).

Solar technology used for the program
The SWH systems installed in Tunisia are almost solely comprised of flat plate collectors. Solar heat pipe technology was briefly introduced as 3 000 units imported from China were installed during the programme. According to Missaoui, the heat pipe technology installations were inadequate for the residential installations due to the rather bad water quality in some areas, the high temperature reached by the collectors particularly in the summer and the frequently required maintenance.

What the program has achieved
Since the PROSOL program’s inception, the rollout pace has sharply increased (from 7 500m² in 2004 to 90 000m² in 2009, resulting in a currently installed base of 160 000 solar water heating units). These figures represent a penetration rate of only 6.5%, thus leaving room for further growth.

A solar water heating program in Tunisia allowed the end user to save between 70-80% on energy costs for water heating. Tunisia is the northernmost country in Africa.

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