In the developed countries renewable energy (RE) technologies such as solar water heating are most often introduced for environmental reasons - to reduce GHG emissions mandated under the Kyoto Protocol. South Africa signed the Protocol in 2002, but it does not commit non- Annex 1 (developing) countries such as South Africa, to any emission targets in the first commitment period (2008 to 2012), and it creates no external pressure to reduce emissions. Disseminating solar water heaters (SWHs) in South Africa addresses two major concerns: reducing peak load at a time when electricity generation cannot always meet demand, and reducing greenhouse gas (GHG) emissions. And, at the household level, SWHs save electricity cost in the long term. RE technologies are not as widely disseminated in South Africa as in some European countries, despite high solar radiation making them well suited. The only RE technology which grew steadily in the last 30 years is unglazed solar water heaters used for luxury swimming pools (Cawood, 2002).
The general environmental awareness is less advanced than in most European countries, and only recently do media cover environmental issues such as global warming and its impact on South Africa more regularly. The South African government generally supports RE, and the relevant policy has a voluntary target of 10,000 GWh to be supplied from renewable sources by 2013. This is approximately 10% of the country's electricity demand and at present less than 1% originates from renewable sources (DME, 2004). Different players in projects and the industry account variously for why the market has not responded more positively, often adducing the absence of promotion, high initial capital costs, and the comparatively low electricity tariffs as primary explanations.
Country overview
Solar water heaters in South Africa
South Africa has abundant sunshine and the average daily solar radiation is between 4.5 kWh and 6.5 kWh per square metre. This resource is relatively predictable and well distributed throughout the country, with some regional variations.
Heating water using SWH technologies has the benefit of saving households money over the long term, mitigating GHG emissions associated with fossil fuel usage, and reducing peak electricity load. It is also the least expensive means of heating water for domestic use on a life cycle cost basis because solar energy is free (Austin & Morris, 2005). SWHs have been identified as a means whereby RE could significantly contribute towards alleviating poverty, through improving the general welfare of households as well as developing productive activities to generate employment. The country has an established manufacturing infrastructure for SWHs and their manufacture and installation would contribute to job creation and skills development. However, the lack of promotion and the high upfront capital cost of SWHs are two key barriers to the development of a SWH market in South Africa.
In 2008, the solar water heater industry in South Africa experienced a major increase in its newly installed collector area: It was the peak year with 30,000 m2 for solar heating and cooling, prompted by power shortages in the national grid during the first two months of that year. Some market players noted an increase in sales of up to 400 % during the entire first four months of 2008, not only because of continuous black-outs, but also due to the marketing efforts by Eskom and the Central Energy Fund (CEF).
Global Solar Energy Industry
Global Solar energy industry accounts for only 0.1% of energy demand.
However, over the past 15 years, global production of solar PV cells has grown at annual average of 25%.
Germany has limited solar insulation but is the global Solar PV market leader; with installed capacity of over 5,337 MW in 2008.
Leading players in solar thermal power: US, Spain, China, France, Italy, Australia, Egypt, Morocco, South Africa, Mexico.
Manufacturing of solar PV cells is dominated by 5 companies: Sharp Electronics Corporation, Kyocera Solar, BP Solar, Shell Solar Industries, and Sanyo Electric Company. Japan accounts for 50% of the world's solar-cell production and exports, followed by the USA and the EU;
World market for PV modules and systems is currently heavily influenced by government policies, mainly subsidies, exports as aid, directed credit.
Tied aid distorts competition in favour of the exporter whose products are given preference (OECD, 2005).
Overview of Energy Sector in Kenya
Energy consumption more or less equal to production from all sources.
Characterized by heavy reliance on biomass, frequent power outage, low access to modern energy, over-reliance on hydroelectricity and high dependence on imported oil.
Renewable energy (RE) considered one of the potential sources.
Located astride the Equator, Kenya is endowed with vast RE such as solar, wind, biomass, bio-fuel, geothermal and hydropower among others.
Large potential of RE but limited utilization.
However, interest growing due to unmet electricity demand, increasing global oil and gas prices & environmental pressure. Modern energy consumption/capita: 84 KgoE
Electricity consumption/capita: 128 kWh
National electrification level: 9%
Rural electrification level: 5%
Current Total Electricity Production (Hydro, Thermal, Geothermal, Wind, Solar, Biomass (co-generation): 1245.65 MW.
Distribution of electricity installed capacity: hydro 57.6%; thermal
31.5%; geothermal 10.9%.
Share of RE in total electricity consumption: 70.31%
Share of solar energy in total electricity consumption: 0.32%
The GoK is promoting RE technologies through a number of policies and programmes (Sessional Paper No. 4 on Energy of 2004 and the Energy Act 2006).
Meeting Kenya's future energy needs requires a clear, longterm policy framework which provides incentives.
Kenya has the largest private sector dominated solar PV home systems in a developing nation, with annual growth rates of 10-20% in recent years
Country is the driver of regional trade in solar energy goods
There are 25 - 40 players (of which 5 are main players) in trade in solar energy goods and service.
Main products in the market: Solar PV modules; Solar batteries; solar charge controllers; solar lighting kits (d.c. filament and fluorescent lights, torches, rechargeable lanterns); solar powered mobile phones; Solar-powered pumps (d.c. powered submersible water pumps); Solar-powered fridges; solar cooking ovens.
200,000 to 300,000 Solar PV home systems currently in use;
Majority are 14-20 Watts panels for domestic usage
Comprise an installed capacity of 4MW and generates 9GWh of electricity annually
Demand for electricity generated from home-based PV systems is projected to reach 22GWh annually by 2020.
Number of solar water heating units currently in use estimated at over 140,000 units (equivalent to 19,000 ToE annually).
Projected demand for solar water heating to grow to 400,000 units by 2020 equivalent to 150,000 ToE.
Kenya has been able to expand access to poor rural households through unsubsidized, market-based sales.
Solar energy is underutilized due to a number of factors - relative cost of systems; lack of standards Trade & Production
Main Imports and Exports:
Solar PV modules; Solar batteries; solar charge controllers; solar lighting kits; Solar-powered water pumps; d.c.-a.c. power converters; Solar cooking ovens
Import Sources:
Main sources: mainly, India, Taiwan, China, Australia;
Others: France, Germany, Hongkong
Tariff and Non-Tariff Barriers
In Kenya, Solar PV panels, solar water heaters and solar pumps are zero-rated (0% import duty) but attract a 16% Value Added Tax (VAT)
Non-Tariff Barriers
Lengthy procedures related to valuation of goods at customs
Quality of inspection procedures: poor quality solar energy equipments find their way into the market.
Transiting procedures
Business licensing and registration
Immigration procedures:- Obstacles to exporting labour/services to the region - requires work permit; requirement to hire/subcontract local persons/labour force (e.g., in Uganda); Remuneration for services offered in the countries in the region is subject to taxes in that country;
Bureaucracy at point of entry into the country
Red-tape
