Save on your pocket and the environment by using solar water heating

With the recent introduction of the Eskom rebates installing a solar water heater as apposed to a conventional electrical geyser has become a no-brainer, and that’s besides the obvious environmental benefits.

Never mind the usual blurb from the solar suppliers about how long (or soon) it takes to pay off your new solar geyser, given the current interest rate environment, the Eskom rebates and looming further hikes in the cost of electricity, installing a solar water geyser when building a new house can in fact give you a positive cash flow from the outset.

Using the example of a 200litre geyser (suitable for a 3-4 person household) the numbers look like this:

Expect to pay around R21 000 for an Integrated Solar Geyser. That’s the type where the geyser is attached to the panel and is visible on your roof. If you don’t fancy the look of having a geyser on your roof add around R2000 for a split system – where the geyser is fitted inside your roof and only the panel is visible. The Eskom rebate will be in the region of R6000, so once you have duly filled in and submitted the requisite forms (with the solar supplier) and received your rebate within 8 weeks ( see for more info) you will have effectively paid around R15 000 ( or R17 000 for a split system). Make sure the sytem you are buying qualifies for a rebate as not all systems do. If building a new house factor in the cost of a typical 200litre electrical geyser, which would of set you back around R5200. So for a new build the additional cost of going solar would be R 9 800 or R 11 800 respectively.

The solar suppliers estimate that monthly savings in electricity by heating your water with solar can save up to 40% of your electricity usage. Lets be conservative with that figure and assume an average minimum saving of 30%. Assuming a monthly household current electricity cost of R500 that would represent a saving on electricity bills of R150 per month.

The guarantees on solar heating systems vary from 5 to 10 years, and suppliers claim that their systems will last for as long as 20 years. For the purposes of this costing I will assume that a solar heating system will remain operable for 10 years. If one finances the additional cost of the solar heating system over the conventional geyser, over a period of 10 years at the current prime rate of 9% (using your existing bond for instance to do this) the monthly payback will be R149,47 per month for the split system (R11 800 borrowed at 9% over 10 years), or R124.14 for the integrated system – effectively the same or less than your immediate saving in electricity costs. And that is before Eskom gives us their next 25% increase! Sure interest rates are lower than ever and will start increasing again but that is a cyclical price movement. Electricity costs will only move upwards.

What about your existing house? For replacing your existing geyser with a solar water heating system you of course can’t deduct the cost of your current old geyser. In this case the monthly repayment, calculated on a 10 year loan on the same basis, for the total cost of the solar heating system (less the Eskom rebate), would be R 215,34 for the split system and R190.01 for the integrated system. So while the cash flow wouldn’t be immediately positive (unless you can get that saving up to 40%) it will only take 2 years at the current estimated Eskom price hikes before it is.

In addition going solar will help the environment and reduce your carbon footprint. The reason for this is that the production of electricity from coal is a direct cause of global warming due to the emissions of CO2 during the coal burning process. Furthermore, at 93%, South Africa uses the highest percentage of coal as a means of production of electricity globally ( see ) – so any reductions in your electricity use will largely offset your carbon footprint and benefit the environment.

Written and submitted by Jacques Cronje,

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