In South Africa, water is almost exclusively heated by horizontal electric resistance water heaters placed in the uninsulated roof space of buildings and connected with unlagged pipe systems. The national standard allows for as much as 2.59 kWh of daily standing losses for a 150 litre water heater which is the tank size that dominates the market. Manufacturers of these horizontal electric resistance water heaters have no incentive to improve on these inefficiencies as water heaters are a homogenous product, which competes on price.
To stimulate the market in SWH, a rebate scheme (detailed above) and new building regulations were introduced. The National Building Regulations, to which all new building being erected must comply, were amended in 2010 to make provision for sustainability. To support these amendments SANS 10400-XA was developed and in November 2011 the SANS 10400-XA regulations came into effect. 10400-XA regulates the maximum allowable energy consumption for all new buildings as well as any additions to existing buildings. The amended South African National Building 10400–XA Regulations now require the following:
XA1: Buildings should utilise energy efficiently and reduce greenhouse gas emissions in accordance with a checklist of requirements.
XA2: Not more than 50% of the annual volume of domestic hot water may be heated using electricity.
By the beginning of 2015, the policies in place for HP SWH, had failed to stimulate the market to the extent that was expected and the rebate programme was suspended by the Department of Energy, who took over the management the programme from Eskom, pending a review. It is not clear whether the rebate programme will be re-introduced or whether it will be terminated.
The LP SWH programme was successful as about 300,000 systems were installed across the country over a two year period. This programme delivered additional benefits as it trained locals to undertake the installations (training and jobs); operated on very low profit margins; undertook installations to low quality houses; and provided free warm to hot water on tap for the first time to many households.
To continue funding the programme Government would require suppliers to meet a specified local content requirement to qualify (local manufacturing and jobs). The programme was suspended in 2013 as almost no suppliers could meet the new local content requirements that were introduced for specific components, which became a mandatory requirement. The impasse is currently being discussed between national government and suppliers.
In summary, the key barriers and their statusses are summarized:
Low electricity tariffs: This is no longer a barrier as tariffs have increased by 10-15% (and in some years by 25%) since 2008. However, weak economic conditions mean that most households are unable to make the initial capital investment required for a SWH;
Price of SWH: Most households, even with the rebate, believe that they are too expensive. An electric water heater costs as little as R2,500 (EUR200) whereas HP SWH average around R15,000 (EUR1,200);
Technology choice: As detailed above too many options results in fear of making the ‘wrong’ decision
Enforcement of national regulations: SANS 10400-XA requires new houses to have a SWH or other qualifying technology. A stricter enforcement of the regulation would encourage higher compliance