Solar makes cents – The business case for solar water heating

by Irvan Damon, Ambassador, SESSA SWH

South Africa’s building industry which, like the industry in many other countries worldwide, has a relatively large carbon footprint, would be doing more than just the earth a favour by convincing its clients to install solar water heating systems.

This is because geysers in homes and hotels account for the lion’s share of electricity consumption in those buildings. Switching to solar in existing developments could save as much as 50% on the average household’s monthly electricity bill by reducing the amount of electricity used by a geyser by as much as 70%; embracing solar in new developments will result in lower spend on energy from the word go.

Of course, the suitability of solar water heating in a given facility depends on several factors, including the amount of hot water used and the amount of energy expended on water compared with other uses. The food service, health care, hospitality and multi-unit housing industries all tend to use large amounts of hot water.

Architects, engineers, developers and builders should therefore ensure they understand and appreciate the ‘rands and cents’ case for solar water heating, and strive to boost the utilisation of the technology across their client spectrum and their various building requirements.

This is certainly the trend in developed countries abroad. In fact, a recent study by research and consulting firm, AltaTerra Research, shows that the US solar water heating market is growing at about 20% a year in the commercial sector, which AltaTerra says is a significant acceleration from long-term trends and which bodes well for the development of a robust market.

Hotels are showing some of the most rapid take-up of solar water heating technology. And although offices generally use little hot water, the AltaTerra notes that solar water heating can be advantageous at business parks and office campuses that include services such as dining and athletic facilities.

The benefits of solar water heating were summarised quite simply by AltaTerra: Solar heating installations lower energy expenditures for most customers. It captures about four times as much energy as solar photovoltaic systems, with much less expensive equipment, resulting in a lower long-term energy cost before any cash incentives are taken into account.

Surely our industries and consumers should also see the benefits, and embrace the technology for the benefit of their bank balances and the country’s energy crisis?

Tunisia is one African country that has elected to make use of the free energy provided by the sun to reduce its reliance on a non-renewable liquid petroleum gas supply. Previously, its government had subsidised the provision of a domestic gas supply, but the default rate was high and the energy source non-renewable. It realised, with the assistance on UNEP, that when it ran out of gas, elements of its population would be left without an alternative.

The government passed a new law to provide to the end user a 20% capital subsidy to make solar water heating cost competitive with LPG. This subsidy is financed through the sale of the LPG to Europe, and it is repaid through the customer’s utility bill.

To date, 24 000m² of solar water heating systems have been financed by local banks to the tune of US$5.7-million and installed in 7 700 household. Defaults have been dramatically reduced and customers do not feel the impact of the high initial investment as the cost of their loan is offset by reduced electricity costs.

This, like our own Eskom rebate system, is worth applauding. If you are in the building industry and not yet convinced, consider these facts:

  • · One hour of solar radiation is equivalent to the total energy consumed by the world in a year2. South Africa experiences some of the highest levels of solar radiation in the world at anything between 4.5 kWh/m2 and 6.5 kWh/m2 while parts of Europe receive only 2.5 KWh/m2. This free solar energy can be used for water heating and power generation.

o The average household geyser contributes approximately 4.5 tons of CO2 emissions per year and could reduce these emissions by as much as 20% by installing a solar geyser system; this is an impressive reduction considering South Africa is the 14th highest emitter of greenhouse gases.


  • · 90% of South Africa’s electricity is from coal-fired power stations; the production of 1kW of electricity emits almost 1kg of carbon dioxide (CO2). Burning ten 40 watt light bulbs all day long uses the same amount of electricity as heating a 200 litre geyser only once.

o One solar water heating installation could save an average of 2 000 kWh of electricity, thus preventing 1 000 kg of coal being burnt and the release of 3 700 kg of carbon. South Africa could potentially save up to 3 000 megawatts of capacity – the equivalent of one coal fired power station – if SESSA’s target of one square meter of installed capacity of solar heating per South African citizen is achieved. At the moment, Africa accounts for a very small piece of the installed solar water heating system pie.

Solar water heaters provide proven savings of CO2 emissions; they only use purchased energy during inclement weather; and using more of them will result in less demand on Eskom’s existing power generation infrastructure. Cents and sense.

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