A paradigm shift by the local insurance industry when it comes to the replacement of ‘burst’ geysers could dramatically change the solar water heating industry landscape in South Africa.
In a nutshell, if the industry will accept consumers opting to replace their electrical element geysers by solar water heaters when the electrical element geyser fails, the demand for solar water heaters will spiral, contributing to the growth of a healthier and more sustainable industry.
And, if locally produced solar heating units are used at the point of failure, this could be the catalyst for growth local manufacturers of solar heaters are looking for.
This was the upbeat message from GreenCape project manager, Karin Kritzinger, at a recent networking function hosted by the Cape Town office of the Sustainable Energy Society of Southern Africa (SESSA).
Kritzinger started off by saying that the average short term insurance spend for middle class households is typically divided between motor vehicle insurance, household insurance and insurance of a physical building, usually the primary residence. She highlighted that 70% of all building insurance claims are related to malfunctioning geysers, with 50% of the costs being the replacement of the geyser, and 50% resultant water damage. Many solar geysers are placed outside, reducing the risk of water damage substantially.
Her second point was that about 35 000 high pressure solar geysers are installed in this country each year by the market segment that has homeowners insurance. By contrast, the market for ‘traditional’ geysers in South Africa – that is, those that use electricity to heat the water they hold – is about 450 000 a year. Of this demand, about 200 000 are geysers that need to be replaced by the insurance industry. This makes the industry the largest purchaser of all geyser types.
Assuming that consumers replacing their traditional geysers can be convinced to opt for the solar alternative, the local industry could be boosted by some 200 000 units a year. This would go a long way to reducing the homeowners reliance on Eskom’s grid, and also save them money well into the future.
This argument requires the buy-in of parties other than just the consumers – the Eskom rebate must apply and must be stable for a lengthy period to boost the attractiveness of solar geysers; the insurers have to be prepared to let policyholders replace traditional geysers with solar geysers; and there has to be an education campaign – or ‘hero’ – that effectively communicates the message.
“Simply put,” said Kritzinger, “there are sound environmental and financial reasons for investing in a solar water heater. If the Eskom rebate applies, it becomes even more of the proverbial ‘no-brainer’, and if your insurer allows you to do so when your originally installed geyser fails, opting for solar technology should be fait accompli.”
The outlook is positive, with at least 12 financial institutions (banks and insurers) currently investigating the scheme. SAIA is actively working towards a solution and Sessa is one of the major stakeholders engaged in these discussions. A strategy should be in place by mid 2012.
SESSA is dedicated to the use of renewable energy and energy efficiency technologies including solar-based energies (such as photovoltaics, thermal heating and cooling), wind, bioenergy and hydro. It was founded in 1974 and is one of 50 National Sections and the duly appointed Africa office of the International Solar Energy Society (ISES). ISES is regarded as the premier body in solar energy with members in over 100 countries.
Its office organised the network session to as a forum for education and co-operation for its members. Other speakers included Lance Greyling (MP & Chief Whip, Independent Democrats), Hilton Trollip (Principal Engineer, Energy & Climate Change Branch Environmental Resource Management Deptartment, City of Cape Town) and Lodine Redelinghuys (Energy Marketing Manager, Eskom).
The presentations can be found on the SESSA website www.sessa.org.za