Cape Town - Not all is sunshine and light in the solar water heater industry, Parliament's economic development select committee heard on Tuesday.
There is a "lot of collusion between the different players" on prices, economic development department deputy director-general for electricity, nuclear and clean energy, Ompie Aphane, told members.
He said when power utility Eskom increased its solar water rebate in 2010, suppliers and distributors of solar water heating systems increased their prices too.
"Soon after the rebate was increased, as soon as Eskom announced that the rebate was going to be increased, so did the costs that the suppliers were charging.
"We are very convinced that at the import source... the costs are a lot less... And so you can read that there is something that is not adding up," Aphane said.
Eskom last year effectively doubled its subsidy rate for solar water heaters from about an average of R3 000 a system, to R6 000.
According to a document distributed among committee members, there were 108 accredited suppliers and 245 registered distributors of solar water heating systems in SA at the end of 2010.
Aphane said the current high cost of solar water heaters was among the reasons for the slow rollout of such systems across the country.
The majority of systems on offer - at "too high" prices, ranging from R9 000 to R35 000 each - were imported.
Responding to questions later in the briefing, Aphane said he was not in a position to "categorically" state collusion was taking place.
On progress toward the government's target of installing one million solar water heaters around the country by 2014, he said that by the end of last year, a cumulative total of 30 974 systems had been installed.
"We will exceed the threshold of 55 000 systems this financial year."
Aphane said the government was looking at offering tax breaks to both companies and individuals who implemented energy efficiency schemes, including solar water heating.
This "carrot approach" was awaiting approval from the finance ministry, and the introduction of a reliable monitoring system.
Aphane said the projected doubling of electricity tariffs over the next three years would push many consumers toward installing solar heaters.
"As tariffs almost double, savings will increase, and therefore so will customer willingness to invest in solar water heaters."
He said there were currently an estimated 12 million households in SA. The government aimed to see between five and seven million of them fitted with solar heaters by 2019.