In an effort to reduce energy use in Seychelles, the Energy Commission is setting energy efficiency standards for five types of electrical home appliances entering Seychelles as of next year.
The standards mean it will be mandatory for bulbs, freezers and refrigerators, air conditioners, electric water heaters and washing machines to meet the required minimum standard. The announcement was made by Minister of Finance Peter Larose in his budget address last week.
Larose said that "with this policy, consumers should be able to minimise their energy bills and save money, and should make the most of this wonderful saving opportunity." The new category of purchases will qualify for a break on the Value Added Tax.
The long-term goal is to have only energy-efficient equipment in use in Seychelles.
The chief executive the Seychelles Energy Commission, Tony Imaduwa, said that these appliances were chosen as "they are the common types of equipment found in homes and they consume energy the most."
This was outlined in a baseline study held by the commission that involved 200 households.
"I would say that almost 95 percent [of the population] has access to all these five types of equipment at their place," said Cynthia Alexander, the principal officer of the commission's Renewable Energy and Energy Department.
Distributors importing energy efficient appliances are being encouraged to display the energy efficiency labels that show information about the product's efficiency. Customers can hence choose the best appliance for their budget.
Helping businesses make appliances more affordable
As an incentive, all imported electrical appliances certified energy efficient by the commission will be exempted from the Value Added Tax.
"A VAT exemption benefits the consumer directly as it makes the energy efficient products cheaper for the clients," said Raja Ramani, Managing Director of Cellular Services - the authorised seller of Samsung in Seychelles.
He, however, stated that households that cannot afford to buy energy-efficient products, which are much more expensive, will not have the option of buying a cheaper product.
How residents can benefit
Already a subsidized loan scheme through the Seychelles Energy Efficiency and Renewable Energy Programme (SEEREP) is in place to encourage residents to buy energy efficient and renewable technology appliances. Under the scheme, each household can benefit with up to $10,735 at a five percent rate of interest payable up to five years.
"The objective of SEEREP is to provide you with financial incentives for you to replace your old inefficient appliance and not to start adding more equipment, which will lead to more energy consumption," said Imaduwa.
Ramani of Cellular Services said that if the right of giving loans were extended to the distributors rather than the bank, the customers will not have to pay the interest.
"[Some banks] are not comfortable to give out these loans at these rates especially if they are not getting any guarantee from the buyer themselves," said Ramani.
He added that this has been discussed in the past with the relevant agencies and that they "are ready to put in place a scheme to do this if the government extends the same guarantee that they are extending to the bank under the SEEREP programme."
Ramani is also concerned with the service and disposal of appliances. Well-known brands provide after sales with spare parts in stock, he said and this will ensure that products not working properly can be repaired instead.
Imaduwa said that, together with the relevant ministry, the energy commission is reviewing the waste policy to come up with a mechanism that will deal with electrical and electronic waste.
"We have to look at the whole chain of the product which includes the disposal of the appliances," said Imaduwa, adding that discussions are already ongoing.