Solar Water Heaters – What Are the Benefits?

By Editor


Solar Water Heaters - What Are the Benefits?

The popularity of installed solar water heaters (SWHs) in
South African households remains low, despite awareness regarding the potential
benefits of SWHs amongst potential users slowly improving. Reasons cited are
widespread and include: mixed feelings about quality of products, clarity
relating to potential savings and unreliable installers or suppliers. On the
positive side, it is a fact that this growing market has attracted many new
entrants in the last five years (the market counts about 500 accredited suppliers
at present). Many suppliers have gained strong expertise in selling and
installing SWHs. Therefore, purchasers of new SWHs will very likely benefit
from past experience gained by installers, writes Energy and Power Systems
Analyst, Celine Paton at global consulting and research firm, Frost &

Typical Savings

Typical water heating requirements of residential end
users account for between 30 and 50 % of their electricity bill. Therefore, installing
a SWH provides significant opportunities to save on electricity consumption. According
to Eskom’s Measurement and Verification program (endorsed by the Sustainable
Energy Society of Southern Africa or SESSA), it has been proven that a 200
litres SWH with 3.0 square metres collector saves 3,000 kWh per year (or
roughly R3,300, if converted at average municipal electricity rates).

Similarly, preliminary market research, conducted by
Frost & Sullivan among private home owners that have installed a high
pressure SWH, showed that savings generally range between 20 to 30 %, even
though the majority of surveyed people did not know precisely how much they were
saving. This is mainly due to increasing electricity prices and also because
many simply do not follow their electricity consumption. However, SWH owners
were convinced they made a fair amount of savings. Furthermore, 84 % of these people
affirmed that they were very satisfied with the performance of their system and
that it met their prior expectations.

Technology and Performance

SWH technology is now proven and it is easily
identifiable which model one should install, depending on the geographic location
of the house (and the prevalent climatic conditions), its structure and roof
position compared to the sun, as well as water pattern usage.

As an example, China has the world’s largest installed
capacity, with more than 30 million SWHs already installed thanks to strong
government policy support, a proactive and competitive local manufacturing
industry, as well as strong coordination efforts among local authorities. Cyprus,
Israel, Austria, Germany, Spain, Greece, Turkey, Australia, and the United
States are also good examples of countries that succeeded to introduce SWHs on
a large scale. Many of those countries passed legislation requiring SWH
installation in new buildings, which constituted the main trigger for large
scale adoption.

Indeed, the success of SWHs is explained by the fact it allows
reducing reliance on national energy supply, taking pressure off the
electricity grid, and at the same time mitigating carbon emissions.

A SWH’s performance depends on the level of irradiation.
Consequently, seasons and weather will impact the amount of heating produced. On
a cloudy day, less heat is emitted and, hence, less savings in electricity. For
this reason, a small electrical back-up element is part of the installation to
ensure that water is always heated to a minimum set temperature. Optimum incline
and size of the panels are therefore essential and should be thoroughly
discussed with the supplier and installer.

Investment Payback Period

Equipment and installation costs might appear high, but
considering the increasing electricity prices, the payback period has now decreased
to a range of between 4 to 6 years, depending on the efficiency of the system
installed and water pattern usage. When one makes a decision to purchase a SWH,
one should not only consider price, but rather price and performance. Moreover,
as electricity prices will continue increasing, the payback period may become
even shorter.

Market Incentives

Since 2008, in an attempt to incentivise the uptake of
SWHs to assist with alleviating pressure off a strained grid, Eskom has been
offering rebates to residential home owners for their purchase of a SWH. The
size of the rebate depends on the Q factor of each SWH model, as determined by
the South African Bureau of Standards (SABS), and ranges between R2,858 (100
litres, low pressure) and R8,964 (300 litres, high pressure). The Q factor is a
measure of the heat gained in ideal “normal day” conditions in Pretoria, thereby
indicating the kilowatt hours of electricity it is expected to save on a
typical day. One of the drawbacks is the fact that if a similar SWH system is
installed in Pretoria and Upington, the system in Upington will benefit from
the same rebate as the one in Pretoria, despite more beneficial climatic
conditions that should lead to more heat and thus more electricity savings,
notes Frost & Sullivan.

Installed Capacity

To date, total SWH installed capacity is estimated at about
215,000-250,000, including low and high pressure systems. According to a
technical specialist at SESSA, about 162,000 rebate claims have been received at
Eskom and 129,500 have been settled. Among those, 41,000 claims count for residential
end users that have purchased a high pressure SWH. Uptake has remained low,
considering the one million target set by the government (to be achieved by
2014), but is expected to grow as electricity prices keep rising and more
people want to reduce their dependency from grid-supplied electricity.


Finally, according to SESSA’s technical specialist,
quality SWH systems should have a 5-10 year warranty, and 15-20 year life
expectancy, leaving ample years for “free” benefits after investment costs have
been recovered.

Also, with the consolidation of the market, the “fly by
night” suppliers will be eliminated, resulting in better end quality services
and products, and prices will eventually decrease thanks to larger economies of

For those interested in installing a SWH, the Eskom
Integrated Demand Management website provides all details regarding the rebate
programme, as well as a list of accredited suppliers and products per region
with the corresponding rebate.

Installing a SWH does provide significant advantages and
these will increase with time as electricity prices keep rising.


By Frost & Sullivan’s Energy and Power Systems
Research Analyst, Celine Paton

 [email protected]

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