Solar heaters: don't get burnt

Johannesburg - The recent massive hike in rebates on new solar water heaters (solar geysers) - followed by the energy authority's approval of power price increases over the next three years - have made a pretty solid case for getting one.

The rebates, which vary according to energy efficiency and the hot water volume of the water heaters, have in many cases more than doubled.

Two examples:

• On a 300-litre Solahart system, manufactured in Australia and supplied locally by Selected Energy, Eskom will now pay consumers R12 097 (in cash), compared to R4 917 before.

  The total installation cost (including the system, a time switch, VAT and an electrician's certificate of compliance) could set the buyer back some R35 500.

  After the rebate is paid, the new owner should recoup the remaining R23 403 within a couple of years with the money saved on electricity bills. Many geysers can halve a household's power usage.

• On an Xstream 300-litre system, supplied by Atlantic Solar Heaters and produced in Paarl, the rebate has gone up from R5 722 to R9 566. The system's total installation costis R24 500, leaving the customer R15 000 out of pocket - which the company says should be recouped through power savings within three years.

With Eskom threatening to cut the rebates next year, the demand for solar geysers has jumped. One firm reports that the percentage of people who agree to an installation after a quotation has rocketed from 30% to 80% in a month.

For the average consumer, finding the right solar heater geyser is the hard part.

The number of solar heater suppliers in SA has exploded - from less than 10 three years ago, to more than 300 now.

"Every bloke with a bakkie suddenly thinks he can make a killing in the solar industry," says one supplier of solar systems.

There are also many solar heater systems on the market, with a lot of scaremongering about sub-standard products.

Some local suppliers claim that some of the imported vacuum tube systems (particularly from China) are more suited to cooler northern climes and when their components break down, overheating, damage to property as well as boiling tap water may follow.

How not to get burnt by a solar geyser supplier:

• To obtain an Eskom rebate, the geyser system has to get an SABS mark of approval. This involves a stringent audit of production facilities and other checks. Make sure your supplier can show you the relevant documentation and can guarantee beforehand what rebate you will get on the system.
• Bigger is better. Larger geysers will give you the best saving per litre. And in some systems a 300-litre geyser will only cost R800 more than a 200-litre one.
• Get a list of references from the supplier and contact previous clients to find out whether they were satisfied, is the advice of Koenraad Louw of Atlantic Solar in the Western Cape.
• Look at the supplier's track record. Many one-year-old companies are offering guarantees of 10 or 15 years. You must make sure that your guarantee will be honoured, says Jim Hickey of Selected Energy.
• Make sure the amount quoted includes all costs - including a time switch (required by Eskom), a certificate of compliance from an electrician and VAT.
• Your supplier should be a member of the Sustainable Energy Society of Southern Africa (Sessa). Louw says Sessa is effectively the ombud for the industry at the moment.

What to expect

After compiling a short list, deciding on a system and a supplier and having the geyser installed, full payment must usually be levied.

On completion of the installation, you will be given a rebate claim form, which requires your banking details. The forms are sent to Deloitte in Cape Town, which represents Eskom and handles the rebate process.

Hickey says his clients typically receive the cash rebate within four weeks.

How to get financing

For many households, finding the money to pay for the installation is a problem.

One option is to increase your mortgage or ask for home improvement financing from your bank.

Increasingly, new financing products are also coming to market. Teljoy Solar has introduced a "green credit scheme", which allows you to get a geyser with a small (or no) deposit by paying monthly instalments.

Louw says initiatives, spearheaded by government as part of its plan to have one million heaters installed in five years, are also being planned that will allow households to "borrow" money in future for the systems and pay it back as part of their monthly utility account over a five-year period. He expects developments on this front later in the year.

For businesses, government is expected to announce a number of financial benefits (including tax incentives) to encourage energy efficiency soon. The incentives could be in place as early as mid-year.

- Fin24.com