Eskom rebate: Is this the end for homeowners?

The Department of Energy (DoE) plans to discontinue the domestic Eskom rebate programme, according to members of the Sustainable Energy Society of Southern Africa (SESSA). SESSA members claimed the DoE intends to use the allocated domestic rebate funding to fund energy service companies (ESCOs) on specific projects.

The rumours were confirmed when Nersa released a consultation paper on the revision of the energy efficiency and demand side management (EEDSM) programme and the standard offer programme (SOP). According to the document, monies originally intended for Eskom and solar water heater consumers will be used to fund specific ESCO projects.

Selected Energy managing director (MD) Jim Hickey feels this step will severely hinder government's attempts to source 10 000GWh from renewable energy sources by 2013.

"The original Eskom DSM programme was aimed at homeowners, because households consume up to 17% of the monthly national energy. A solar water heater reduces energy consumption per household by up to 50%. Each solar geyser installed immediately reduced the amount of energy Eskom had to supply," said Hickey.

"The new programme is more likely to help the government reach its target of a million solar water heaters by 2013, but a million solar water heaters doesn't necessarily help Eskom. These systems will almost certainly be for new buildings and low cost housing developments, meaning they won't reduce the pressure on Eskom in the least. ESCOs will roll out cheap solar systems to new and low cost developments that put significantly less pressure on the Eskom grid than middle- and upper class households," he continued.

"The DSM programme was introduced in 2008 in an attempt to reduce the pressure on the Eskom grid. This step seems contrary to that objective," he said.

According to a document published in December 2008 by Chemical and Allied Industries' Association (CAIA), water heating, lighting, pool pumps and space heating account for 77% of electricity usage in the average household. Of this 40% - 50% is used by electric geysers.

In addition to the cost of commercial water heating solutions, Hickey is convinced that homeowners will stop investing in solar water heaters altogether without the rebate.

"Due to the large upfront investment, homeowners often can't afford a solar water heater. The Eskom rebate went a long way in making solar geysers affordable. This becomes very clear when you look at the increase in solar water heater sales since the incentive was introduced in 2008," he said.  

According to an Engineering News article, Nersa will hold public hearings in August 2010 to discuss the changes with the hopes of implementing the final rules by September.