A relatively small market for solar thermal applications has traditionally existed in Solar Water Heating (SWH) for the residential sector. Annually approximately 450,000 electric water heaters are sold in the country to service a housing stock of 7 million, this excludes government subsidised and informal housing. The South African domestic SWH market can be divided in two distinct sectors – 1) Replacing predominantly resistance elements with high pressure SWH, where there is competition with heat pumps; and 2) Providing hot water with low pressure SWH to low income households who otherwise would have used a kettle or paraffin stove to heat their water. High pressure systems have an electric resistance element to offset any energy shortages whilst low pressure systems do not. In 2008 Eskom, the national utility, was mandated by the Department of Energy to administer a SWH incentive programme to stimulate uptake. In 2010 the SA President and Minister of Energy set a target of 1 million installations by 2015. The Eskom rebate programme was later expanded to include low pressure systems for subsidised housing. Only South African Bureau of Standard (SABS) approved systems are eligible to participate in the rebate programme to ensure that SWHs meet pre-determined minimum requirements for quality, performance and safety. However, this rebate on such systems has since expired and fel short of the 1 million goal by approximately 600,000
High Pressure SWH: Found in middle and high income residential homes, where the typical tank size is between 200-300 litres. In South Africa both flat plate and evacuated tube technology is available with no outright market domination. Suppliers also offer thermosyphon and split systems. Although this offers consumers more options it does create confusion about which is more effective and makes it difficult for either technology to create the economies of scale which would reduce installation costs. In 2014 it is estimated that there are 150,000 HP SWH units installed with an average area of 4m². This equates to 600,000m² of installation area.
Another SWH technology used in South Africa, is unglazed plastic water heating for swimming pools. It is estimated that there approximately 800,000 swimming pools in South Africa, the majority of which are not heated by solar or electricity. In 2014 it was estimated that there were 4,335 installations with an average of 20m² / installation, implying that there is 86,700m² of unglazed water heating in the country.
Low Pressure SWH: These systems have a storage capacity of between 80-100 litres and are installed on government subsided housing which is a free-standing single family house of 50m² or less. The vast majority of units make use of vacuum tubes as these are imported for less than flat plate collectors can be locally manufactured or imported.
There has not been any state subsidised installations since the cancellation of the Eskom rebate program but there has been a growing interest in the Solar Heat for Industrial Processes. The industrial sector in South Africa is the largest consumer of energy, accounting for 37.3% of final energy consumption. Industrial energy use is predominantly thermal with process heating estimated to account for two thirds of energy end-use. Currently, this thermal energy is primarily supplied by fossil fuels, which contribute to greenhouse gas emissions.
A study of steam demand from package boilers in South Africa, highlights the food and beverage sector as the best opportunity for SHIP integration, with an estimated steam demand of 17.3 PJ/pa. The food and beverage sector is also one of the largest industrial sectors in South Africa and has been experiencing sustained growth over the past 15 years. Opportunities also exist for SHIP integration in the textiles, chemicals, paper and pulp and automotive sectors.
A key barrier to the development of a SHIP market in South Africa is the low costs of competing fossil fuel energy sources such as coal and natural gas. Large boiler systems are typically coal fired, whilst smaller companies tend to make use of more expensive petroleum-based fuels such as fuel oil or paraffin. High initial investment costs for SHIP plants remain a challenge to small and medium sized companies, who typically require financing of plants.