24 April 2018

South Africa: Solar Water Heater Programme in Hot Water

press release

The Department of Energy (DOE) has cut the budget for its Solar Water Heater (SWH) programme from R394 million last year to zero in the 2018/19 financial year.

The DOE's Annual Performance Plan (APP) stated that since the programme was moved back from Eskom, over 80 000 units have been manufactured. One of the goals set out in the APP is to provide a further 20 000 households per year with non-grid (mainly solar) electrification and 57 000 solar water heaters are expected to be manufactured over the medium-term.

However, no progress has been registered in respect of the last and important phase of the SWH programme, which is the installation phase. The Department moved this phase to the Central Energy Fund (CEF) for it to commence with installation in collaboration with the Independent Power Producer (IPP) Office.

The DA will therefore write to the Minister of Energy, Jeff Radebe, to request that he explain how it came to be that there is no money allocated for the programme when almost R400 million was budgeted for it previously. The Minister must also provide steps to prevent the closure of the industry.

To date, the IPP Office and energy officials have not responded to queries on this budget cut. The budget cuts will affect a number of small medium enterprises, with closures and job losses on the cards.

We have been informed by one such company that 85 jobs are on the line. The DA will conduct an oversight at the company to engage with the management and staff.

A further indictment on the Department is the closure of the request for proposals phase of the programme to supply SWHs. It was cancelled based on the fact that it took too long to finalise.

Because the department and IPP Office did not finalise it in time, it is now unlawful to continue with this request. This is an administration error that will cost the industry dearly.

The SWH programme is a crucial part of the energy mix and it is up to the government to ensure that its growth is supported and not threatened.

Tandeka Gqada MP

DA Shadow Deputy Minister of Energy

South Africa

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