Policyy and
legislative
requirements for
SWH
Implementation in
Cities
Soltrain
S
lt i W
Workshop
k h
12 August
g
2010
We can remove 1-2 power
stations from the grid if a
national
ti
l rollout
ll t off SWH
SWHs iis
achieved
Jobs, jobs, jobs
• To meet Cape Town’s target of 300 000
q
800 000 p
person days
y
units would require
of work
Benefits for environment and
global warming
• Ave 2T per year per SWH installed
Financially sound
• Financially beneficial to end user
• Financially beneficial to country in avoided
generation costs
Very slow SWH implementation
rate!
City Targets
City Target (by 2015 unless otherwise stated) JJoburg b
Cape Town eThekwini Nelson Mandela Bay
Ekurhuleni Th
Tshwane
150 000 000
300 000 50% by 2020
y
60 000 7 000 by 2011 60 000 000
H
How
d
do we achieve
hi
a mass
rollout of SWHs?
Residential Market for Hot Water
Use
Households number vs Income levels
1,000,000
Stove based water heating
Num
mber of hou
useholds
900 000
900,000
• Market 6.32 million
• Poor/low/medium income market
800,000
Middle income geysers
Upper income geysers
• Market 2.17 million
• Income R6 000 - R16 000/month
• Market 1.38 million
• Income > R16 000/month
700,000
600 000
600,000
500,000
400,000
300,000
200,000
100,000
• Market 1.24 million
• Poor/low income market
• Market 1.38 million
• Income < R 6 000/month
• Indigent income market
50,000
0
35,000
0
27,500
0
22,500
0
18,000
0
15,000
0
13,000
0
11,500
0
10,500
0
9,500
0
8,500
0
7,500
0
6,500
0
5,500
0
4,500
0
3,500
0
2,750
0
Poor/Low income geysers
No electricity
2,250
0
1,800
0
1,500
0
1,300
0
1,150
0
1,050
0
950
0
850
0
750
0
650
0
550
0
250
0
0
Non Electrified housholds
Monthly income Rands
Source: South African National SWH Strategic Framework and Implementation Plan
Electrified without a geyser
Electrified with a geyser
The carrot or the stick?
IInstitutional/Business
tit ti
l/B i
Drivers
Di
Local,provincial,national govt
Eskom DSM
Financial institutions
Business
CDM
Legislation
Bylaws
Building
u d g Codes
Incentives
Subsidies
Grants
Tax rebates
Creative business
solutions
Carbon financing
SWH Implementation Rate
‘Donkey’
International Best Practice
Implementation
p
interventions
•
•
•
•
•
•
•
•
Legislation/regulations
Rebates/subsidies/grants
Low-interest loans
Tax concessions
Import duties
Quality control
Government & industry support
A
Awareness
programmes
Lessons Learnt
• Legislation for new build a common factor in
l di countries
leading
ti
– Lowest cost option to government
– Leads
L d tto mostt dramatic
d
ti iincrease iin SWH
SWHs iinstalled,
t ll d iin
both new build and retrofit markets
– Barcelona & Spain: complete absence of subsidies
subsidies,
but with legislation
• Subsidies have problems
– Installation slows/halts when subsidies removed
– Installations stall when subsidy announced
– Where it has worked: sustainably managed
progamme linked to avoided cost of generation
Legislation:
g
The best intervention!
• National
– EE in buildings Amendment to National
Building
g Regulations
g
Act
– Addendum onto SANS 10400
– 50% of water heating in new buildings from
sustainable source
– July
J l 2010,
2010 8 months
th ttraining,
i i
apply
l April
A il 2011
• Bylaw
y
– Potentially implementable by 2011
– May have higher standards
Financial case
• Need a clear financial benefit case for the
g
is to be
end user if legislation
uncontroversial
• How does including a SWH benefit the
end user?
Financial Conclusions
 Financing a new build SWH is immediately
financially beneficial to end user from 6 - 20 year
bond repayment basis
 All new houses above RDP level to benefit from
having a SWH.
Legislation Justification
International Best Practice
Legally sound
Financially sound
National technical standards in place
Suitable supply capacity available
Implementable
Legislation recommendation
Effective legislation enforcement requires a
g
trained,, motivated building
inspectorate in all municipalities.
Current status – stressed,
stressed understaffed,
understaffed
disempowered. Support is required – call
to government to address this.
Quick national policy and
initiatives overview
• DoE
– South African National SWH Strategic
Framework and Implementation Plan
– Target of 1 million in next 5 years
• 800 SWHs per working day, currently 80
• Paradigm shift in delivery required
• Eskom incentive planned to move across to DoE –
standard offer to suppliers in concession areas-key
nott to
t create
t confusion
f i in
i financial
fi
i l planning
l
i
• Mid-low income – free of charge to small charge
depending on system
• High income – attractive financed solutions
Quick national overview
• DTI
– EE legislation for buildings (incl 50% water
heating requirement from efficient sources)
• Eskom
E k
– SWH incentive doubled in 2010, good
financial cases starting to be made for retrofit,
– pote
potential
t a sshifting
t g ac
across
oss to DoE,
o , but flexibility
e b ty
will be removed if this occurs
• DPE
– Installer training – currently ‘training the
t i
trainers’,
’ working
ki with
ith PIRB on certification
tifi ti
How can cities contribute?
• Mid-High
Mid High income and commercial rollout
through
– Efficient water heating legislation
enforcement
– Financed
Fi
d monthly
thl repaymentt schemes
h
f
for
the new build and retrofit markets driven
either
ith iinternally
t
ll or externally.
t
ll Possible
P
ibl unit
it
price reduction from municipal EE fund.
– Potential increased levy on monthly electricity
bill for electric geyser users
How can cities contribute?
• Low income rollout through:
– Partnership
p with p
province new build
programme (Nelson Mandela Bay)
– Possible price reduction per unit from EE
fund (ring fenced EE portion on electricity bill)
– Reduced cost from Eskom incentive
– Co-ordinate future free installation from DoE
standard
t d d offer
ff
Concluding remarks – key
requirements for success: Low Income
• STABLE and SUSTAINABLE national subsidy
scheme in place! (A real problem currently!)
• BULK PROCUREMENT to match low pressure
SWH subsidy
• AWARENESS RAISING and MAINTENANCE
PROGRAMMES essential
ti l
• CARBON financing for all sustainable energy
interventions in RDP households
Concluding remarks – key
requirements for success: Mid-High
• LEGISLATION is essential – but SUPPORT for
BUILDING INSPECTORATES key to ensure
implementation on the ground
• STABLE and SUSTAINABLE subsidyy scheme in
place!
• ATTRACTIVE FINANCING and reduced costs
from BULK PROCUREMENT will make SWHs
attractive to mid-high
mid high income
• CARBON financing must be sourced
Thank You
Andrew Janisch
andrew@sustainable.org.za
021-7023622
0849558130