Eskom notice to withdraw from solar water heater rebate program risks thousands of jobs

13 January 2015

I will today write a letter to Minister of Energy, Tina Joemat-Pettersson, requesting that she confirm on record that the Department of Energy (DOE) has plans and processes in place to allow for the smooth transition of the solar water heater rebate programme from Eskom to the DOE.

Eskom now risks creating a major disruption in the solar water heater industry with its woefully inadequate notice of withdrawing from the program.

If a new rebate programme does not start running immediately after Eskom withdraws, there will be a complete stop in installation and many companies and thousands of employees will be out of business and work.

The Solar Water Heater industry should have seen massive growth over the past five years given the importance of solar water heaters in reducing energy demand on the grid. Instead what we have witnessed is the government falling woefully short of its target of installing 1 million solar water heaters by 2014. The industry is also facing a precarious financial state due to the uncertainty given to the market by government's constantly changing policies. In fact the government only recently ended an 18 month moratorium on the installation of low pressure solar water heaters, which has already had a devastating effect on this industry. 

The government's revised policy also repeats the mistakes of its past programme in that priority is given to the installation of low pressure units whereas it is only the high pressure units that actually achieve the goal of demand reduction. 

Since its inception in 2008 the rebate programme has subsidised the installation of solar water heaters in low-cost housing projects, 417 000 as at 30 September 2014. The complete system was funded by Eskom, with households getting the geyser at no cost.

Rebates range from around R5 000 and R12 000 depending on the size of the geyser and achieved energy savings of up to 50% to households.

The government's energy savings target requires 10 000GWh to be replaced by power from renewable sources. The DOE believes that 23% of this target can be achieved by solar water heating.

This latest move by Eskom is indicative of an entity in complete disarray, looking for any and all ways to remove themselves from delivering on their mandate.

This state of affairs must not be allowed to negatively affect an entire industry, risk jobs and threaten the livelihoods of those most in need of support. We need a proper government plan for solar water heaters that can urgently reduce demand to the grid and provide certainty to the industry so that it can flourish and provide much needed jobs. 

This latest development unfortunately works counter to both these objectives.  

Statement issued by Lance Greyling MP, DA Shadow Minister of Energy, December 13 2015

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