Financial Case for a City Driven SWH Mass Implementation Approach in South Africa (2009)

This report - prepared by Sustainable Energy Africa (SEA) as part of a REEEP funded project - puts forward the argument that cities should treat Solar Water Heaters as the provision of a service; and that they should be installed as part of City-owned infrastructure for which the building owner will pay a monthly rate.

SEA explains that this would allow cities to diversify their traditional income stream of electricity sales into one of both electricity sales and hot water. Otherwise, with a private SWH business model, the State could lose up to 30% of income through declining electricity demand from residential customers.

To support its argument, the report provides criteria and business cases demonstrating how such an approach could be successful. The public authority would have to procure a proven service provider for installation and administrative management. The City would then pay the service provider but still own the Solar Water Heaters. Local or international infrastructure development financing will be essential, and a 10 year replacement model should be chosen. The report’s specific cost estimations and business models further prove that it would be possible for the City to better or at least match what the end-user would pay in a private scenario.

Author: Sustainable Energy Africa

Date: 2009

Pages: 8

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