Even without the rebate, it still makes sense to go solar

Are you considering energy efficiency because of a rebate or subsidy or because you are looking to save energy and money? 

The solar water heating rebates introduced in 2008 ended in April 2015 and whether they will return is a matter of debate within both the industry and among consumers. SESSA doesn’t know whether the rebate programme will be reinstated and if so, what form it will take and communication from the Department of Energy has been obscure. 

However, the landscape has changed markedly over the last 7 years with the steep increase in electricity tariffs. Projected savings through solar water heating show that over the next 5 years and assuming a modest annual tariff increase of 8.5%, one will achieve, in Rand terms, as big a saving or indeed even more as you would have if you had invested in a solar water heating system at any time during which the rebate was available. SESSA Solar Water Heating Chair, James Green, takes us through the numbers.

Electricity Costs 

Let’s look at a few facts as to why and how solar water heating should now be approached.

The cost of electricity has gone up by 100% since 2008, and energy efficiency   is now more relevant than ever before. Over the next 5 years it is likely that the kWh price will increase by another 50% or more.

Cost of Electricity

There are some 2,400 electricity tariffs in SA. A price per kWh of R1,85 is chosen for 2015-16, but will be higher in areas such as Cape Town

Choosing a Solar Water Heater – The Research Steps

Choosing a solar water heater is quite daunting. It sounds like a great idea, but do you know what you are actually going to get? Unfortunately it is not as simple as comparing an LED bulb with a 6 Watt rating, giving the same light output (measured in lumens) as a 60 Watt incandescent bulb. Here you can easily work out that you are saving 44 Watts per hour for the same energy service.

When it comes to solar water heating, you need to have some understanding of how much electricity you are using in heating water by electricity. Then you can determine which solar water heater is going to meet your energy savings needs and which represents the best value for money.  

A couple of simple, basic facts will make it easier:

  • For every 36 litres of hot water out of a shower at 40 °C, the temperature most of us feel comfortable showering at, you will use 1 kWh of electricity (This is calculated using formulas that take the specific heat capacity of water and average municipal cold water temperatures into account). 
  • Most showers use 16-20 litres per minute, so a 5 minute shower will use between 90 and 100 litres of  hot water at 40°C. 
  • Dividing 90 litres by 36 litres gives  you 2.5 kWh and at 100 litres, 2.77 kWh.
  • With 4 people in the home all showering for 5 minutes once a day, the energy used amounts to 10kWh at 16 litres per minute or 11.11 kWh at 20 litres per minute.
  • Using an average kWh cost including VAT of R1,85 in 2015, that accounts for an amount on the electricity bill of R564 to R627 per month respectively. 

However, it all depends on lifestyle…

  • Hot water use monitoring shows that hot water use at 40 °C ranges from 130 litres per person per day to as high as 220 litres per person per day, depending on seasons, regional variations and lifestyle. 
  • To put that in perspective, for a 4 person home and at a tariff of R1.85 per kWh, usage at 130 litres of hot water per person per day accounts for an amount of R815 per month and at 220 litres per day R1 378 per month.

How much hot water do you use in your home? 

A simple exercise is to add up all the minutes your family members spend in the shower in a 24-hour period. We suggest you do 3 different sample days and average the result. Then multiply the minutes by 16 litres for conservative hot water use or 20 liyres for generous hot water use. Take the total and divide by 36 to get the kWh consumption.

Hot Water Usage

The graph below gives you a quick illustration 

Value for Money – Which System You are Considering

Having chosen the output of the SWH in deemed kWh savings per day you can also do an easy analysis of value for money. 2 simple exercises are:

  • Take the deemed kWh output per day, and multiply that by your cost per kWh from Eskom or your municipality. That gives you a Rand figure per day for savings. Divide that into the installed cost of the solar water heating system, to get the payback point or break-even point in days on your investment.
  • Calculate your savings over a number of years.  Take the daily Rand savings on the system for Year 1 (multiply by 365), and add it to Year 2 having increased the savings by inflation (8% is a conservative figure), and repeat over future years. 

Rebates – Not the Reason to go Solar

So finally back to the question of rebates. Does it still make sense to go solar without rebates. The answer is a resounding YES!

To illustrate this is:

  • If you had bought a 150l SWH in 2008 with an output of 7,5kWh per day you would have saved approx. R22,000 over 5 years including the rebate. 
  • If you had bought the same system in 2014 it would save you R33,400 over 5 years including the rebate. 
  • If you bought the same system today without the rebate it would save you R30,000 over 5 years.

So even without the rebate it makes total sense to go solar and indeed every year the price of electricity goes up it makes even more sense.