Eskom Subsidy for Solar Heating Devices Reduced

Eskom introduced a subsidy during 2008 to stimulate the solar heating market in an effort to conserve energy consumption after a period of disruptive blackouts. The aim was to have one million solar water heating devices installed by 2013. The project was off to a slow start, with only 2 000 consumers taking up the offer in the first two years. The reason for this was obvious as the level of the subsidy was relatively modest: a consumer initially had to pay for the solar water heating device upfront -  and it was complicated to claim and receive the rebate which was restricted to the first R15 000.

During January 2010; Eskom improved the scheme by doubling the value of the subsidy and allowing suppliers to sell the solar devices at discounted prices. The suppliers then claimed the rebate. By the end of 2010, Eskom had subsidised 64 389 solar water heating installations. Hillary Joffe, spokesperson of Eskom said, "We made it clear when we increased the subsidy it was a temporary measure to stimulate the industry ".

The announced subsidy cuts on imported devices are greater than those of local content. The average subsidy for an imported 300 litre capacity device, including VAT, is R9 960, which will be reduced to R7 470. The average subsidy for the equivalent type of device with 80 percent local content was also R 9 960 but is cut to R8 964.

At the current rate of 60 000 subsidies a year, Eskom would take 17 years to reach its target of one million solar water heating devices installed.

Pieter Rautenbach