Learning Note

LOW COST SOLAR WATER HEATING

PROGRAMME

Edition Number: 03/2012

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Ethekwini Municipality’s Energy Office And Municipal Institute Of Learning (Mile)In Partnership With Eskom, South African Local Government Association (Salga), Co-Operative Governance And Traditional Affairs (Cogta) And Kzn Energy

Table of ContentsAbout MILE Learning Notes INTRODUCTION OVERVIEW OF THE LEARNING EXCHANGE THEMES 1. Exactly what is a Solar Water Heater and how does it work? 2. How does the national ESKOM program work? How can Municipalities benefit, and when does it get started? 3. Lessons Learned from eThekwini 4. Lessons Learned from ESKOM 5. Carbon Finance: An Overview 6. Introducing a Municipal Toolkit for SWH 7. Way Forward and Implementation 8. Lessons Learned from Workshop 9. Viewing Sites with Installations 10. Some Contact Details 11. Appendix • The Parking Lot • General Issues

Acronyms and Abbreviations

COGTA Cooperative Governance and Traditional Affairs

ESKOM Electricity Supply Commission

KSEF KZN Sustainable Energy Forum

KZN KwaZulu Natal

LN Learning Notes

MILE Municipal Institute of Learning

SALGA South African Local Government Association  

About MILE Learning NotesThe purpose of the MILE Learning Notes series is to document key issues, discussions, recommendations and challenges that emanate from master classes, seminars and learning exchanges. The intended users of these LNs are municipal officials involved in housing, LED, electricity and water.

On 02 March 2012, eThekwini Municipality hosted the Low Cost Housing Solar Water Heater Workshop for KZN Municipalities. This event was made possible by MILE and the Energy Office in partnership with SALGA, ESKOM, COGTA and KZN Energy. The purpose of the event was to indicate lessons learned and provide sources of information and examples of good practice, direct readers to some relevant examples of case studies, projects and programmes, as well as other sources and relevant information. The LNs seek to assist in generating information required to prepare and enhance the capacity of local municipalities in KZN in preparation for the forthcoming Solar Water Heater Programme to be implemented in nationally by 2014.

It is hoped that the session will go a long way in assisting municipalities to provide practical solutions to low cost housing solar water heater projects. Comments and suggestions for the improvement of these LNs are welcome. This is an open ended series of LN updated and improved on an ongoing basis. More will be added as necessary. These, together with requests for further information, should be addressed to mile@durban.gov.za.

IntroductionThe workshop was led by Eric Apelgren, Head: International Governance Relations. In his introductory address, he indicated that for programmes of any nature to be successful, political buy-in and administrative commitment was critical. Municipal officials need to be on top of their “game”, and Councillors are expected to become a link that gives poor communities solutions to environment protection and climate change.

The municipal delegates were welcomed by the Honourable Mayor: Councillor James Nxumalo. He referred to the State of the Nation address made by President J. G. Zuma recently were a pronouncement was made that a solar water heater programme will be rollout over the next two to three years throughout the country. It is anticipated that at least 200 000 units will be allocated to the province. eThekwini Municipality has installed approximately 20 000 units and is in the position of sharing experiences and lessons learnt. In essence, all municipalities need to take advantage of the proposed national programme through the assistance of ESKOM.

Exactly what is a Solar Water Heater and how does it work?

Ms Abigail Knox from the KZN Sustainable Energy Forum (KSEF) took us through this presentation and explained what a solar water heater is and how it works. In doing so, Knox defined the solar energy process. Solar energy arrives on surfaces in three forms, namely: Direct Radiation (travels directly from the sun); diffuse radiation (is scattered in the atmosphere and arrives at surfaces at various angles); and reflected radiation (is reflected from objects in the surrounding environment).

Solar Thermal Energy vs Photovoltaic Solar EnergySolar Thermal energy involves the conversion of energy in the form of radiation into thermal energy. Thermal energy is then converted into electrical energy (CSP). Thermal energy can be stored more economically than electrical energy. Thermal energy can be utilized directly for solar water heating, solar cooking and drying and so on). Photovoltaics involve the conversion of energy in the form of radiation directly into electrical energy. It involves the utilization of photovoltaic cells made from semi-conductors. It is a portable and scalable source of electrical energy and is relatively inefficient and expensive.

Day One

Solar Water Heating: Solar water heating units consist of evacuated tubes that absorb full spectrum of sunlight including ultraviolet (UV) rays. The hardened glass evacuated tube locks in heat through a copper heat pipe. Cold vapour liquefies and returns to the bottom of the heat pipe whilst hot vapour rises to the top of the heat pipe. A copper header transfers the heat received through the pipe. The pipes are covered by a flat plate collector that is made up of glazing, an absorber plate, insulation, flow tubes and the copper header.

There are two solar water heater systems available, namely, the direct or indirect and the passive or active systems. The direct passive system includes a collector connected to the tank, whereas the direct active system connects the collector to a pump that is connected to a controller and the tank. The controller and the tank are connected back to the collectors (see presentation slides for illustrations). The installation of evacuated tubes must be set on a roof top in a structural frame set at an average 45 degrees in order to effectively absorb the heat. So basically, a complete solar water heating unit consists of an inlet pipe, filler tank, water tank, outlet pipe and evacuated tubes

The need for alternative energy cannot be over emphasized. Coal is extracted from the mines and consists of 100% energy. As it goes through refining process of generating electricity, approximately 69% of the energy is lost and only 31% is used as electricity. At least 3% is lost in the electricity grid and a further 3% is lost through the transformer distribution to the individual household. It is estimated that a family of four burns about three tons of coal for hot water annually.

How does the national ESKOM pro-gram work? How can Municipalities benefit, and when does it get started?

Mr Raj Pandaram, who represented ESKOM, took us through this presentation. ESKOM introduced an “Integrated Demand Management (IDM) Solar Water Heating Programme” where-by a monetary rebate is provided to customers in line with the purchase and installation of a registered SWH system through a registered participating supplier or distributor. According to Pandaram, solar water heating is a clean, renewable technol-ogy that has many benefits such financial savings as result of a reduced energy bill; water heated using the sun and hence a limited grid connection is required; and a cleaner environment which results in the reduction of carbon footprint. ESKOM in collaboration with government and other national energy relat-ed organizations are making SWH technology more accessible and affordable to the South African homeowner.

The ObjectivesThe objective of the SWH programme is to meet government targets. The government has stipulated that renewable energy must contribute at least 10 000GWh of energy by 2013; and that at least 1 million SWH systems must be installed by March 2015. ESKOM has been mandated to reduce energy consumption and demand by installing SABS tested SWH systems. Government also wants to stimulate the SWH industry and particularly, the local manufacturing industry thereby assisting with the development of a supply chain and job creation. It is anticipated that the increase in the installation capacity for solar geysers will lead to job creation and skills development. The rollout of this programme will also reduce the initial high cost of SWH in order to aid uptake. Pandaram pleaded with municipalities to pursue environmental protection by mitigating greenhouse gas (GHG) emissions.

As a result of the programme, the number of installations in KZN has increased dramatically to 140 000 in 2011. Since 2008, approximately 220 000 SWH systems have been installed contributing significantly towards the government target of one million SWH installations by March 2015. Installations to date have been mainly funded by ESKOM and the Department of Energy.

Channels to marketThere are a number of domestic methods to market that have been used. The rebate programme has been employed to individual home owners including Greenfield development. Retailers and chain stores claim rebates on behalf of the customers. Mass roll outs have been implemented for RDP houses free of charge through rebates and contracts. Replacement geysers have also been financed or rebated through insurance companies. Another method that has been used is Assisted Funding through banks that offer lower bond rates against SWH purchase. Employee rollout offers bulk discounts through company based employee rollouts. The Industrial and commercial SWH method provides a standard offer of 70c/kWh.

The current process for mass rolloutsSTEP ONE:

The supplier initiates a project with a municipality and community leaders and gets allocated a project, and liaises with customers.

STEP TWO:

The system is installed according to SANS 10106, Building regulations and other applicable regulations.

STEP THREE:

The supplier fills in “supplier” component of form and customer cedes rebate to supplier or project financier.

STEP FOUR:

The claim form and relevant documents are sent to the Auditors.

STEP FIVE:

Technical Auditors undertake site verifications on 10% installations. Standard M and V as required by NERSA is also completed.

STEP SIX:

Claims are paid within 8 weeks from date received.

STEP SEVEN:

Incomplete claims returned to sender.

STEP EIGHT:

Auditors process customer claims and pay into recipient’s bank account.

The rebate values are based on whether the system is low pressure or high pressure OR imported or locally manufactured. It also depends on the size of the SWH unit as well. Energy and demand reduction is also based on the fact that there is no need for geyser replacement if it low pressure and a definite need if it is high pressure.

The current status of low pressure unitsThe supplier allocations are in place on a quota basis. The supplier must have an allocation to install and submit low pressure claims. Claims exceeding allocated quota will not be processes and paid. Current allocations are only applicable until the end of March 2012. The low pressure system will be phased out of the rebate programme by June 2012. Pandaram emphasized the fact that ESKOM does not determine installation areas as this is done solely by the installers and municipalities.

Although the low pressure rebate programme is to be replaced by a contracting approach, it is still subject to approval. The government needs to ensure job creation and sustainability, BBBEE, supplier development and localization, equity share per province, set aside for coops, support for disadvantaged groups and communities’ and certainty that targets will be met. The market participants need predictability and certainty as well as finance. Implementing agents on the otherside will need rigorous controls and governance in order to ensure quality installations, system sustainability and safety.

System specification and installation requirementsIn terms of safety, all SWH units need full compliance to OSHACT and ESKOM safety requirements; compliance with national standards, and SANS standards. Pandaram reminded participants that safety is not negotiable. Installations must only be made on lower LSM (i.e. Living Standards Measure) houses and, if required, roofs must be reinforced. The maximum size must no more than 150 litres. All SWH systems must carry SABS mark of approval. There needs to be a permanent water connection at the dwelling and the water quality must be within acceptable parameters.

Scope of work for installersThe installers should be contracted to undertake installations and maintenance of SWHs through the development and execution of a five year maintenance plan and training plan. Installer training and skills development must be approved by an accredited solar trainer and approved by SETA. It is proposed that there needs to be quality assurance management and auditing of SWH systems. Call centres need to be established to monitor operations and report progress. Database collection is an important part of administration.

Way forwardIn terms of the high pressure geyser replacement programmes, the existing rebate remains in place. However, there is a need to renew marketing approach with “fresh ideas”. There is need to investigate innovative alternative methods in order to increase market uptake. With regards to the low pressure system, rollouts will be phased out of the rebate programme by June 2012. Rollouts will move to a contracting approach.

Lessons Learned from eThekwini MunicipalityThere are a number of experiences and lessons that can be shared by municipalities, especially those that have implemented the SWH programme. These lessons may include community, installation, and technology Issues; Local Economic Development (LED); procurement; maintenance and service provider management.

Derek Morgan, a Senior Manager at eThekwini Municipality’s Energy Office took us through this presentation and highlighted some lessons learned in the implementation of the SWH programme. The municipality has implemented the SWH programme in phases commencing in January 2011. In actual fact, the first phase ran from January 2011 to June 2011. During this phase, only four suppliers were utilized and it was characterized by many problems. The second phase occurred in response to the COP 17 Climate Change Conference between November 2011 and March 2012. Although they maintained the same number of suppliers during this phase, the system had improved. Phase three has commenced with many suppliers and is characterized by an improved system and is due to commence in February 2013.

There are approximately 29 installation areas in the eThekwini Municipal Area (EMA). In all these areas, people were generally very happy with hot water (and they don’t spend a lot of time heating the water). This has also created a big demand from areas without SWHs. Although temporary jobs are created as a result of these projects, there are many social benefits to the SWH programme.

However, the challenge is the orientation of the SWH. Some SWHs units are facing south instead of east and are not receiving hot water. They are installed close to where the basin is rather than optimal for the sun. There are a number of installation -

problems whereby some units are characterized by poor workmanship. Piping runs outside the roof and is very untidy. Some installation has too few brackets on the pipes and has no mixing valves. Worst of all, taps are not attached, installations are leaking and the stand itself is not attached.

eThekwini Municipality has also experienced institutional problems. Generally, officials are too busy for extra responsibility. Identifying and selecting houses is also a nightmare because in order to receive the units there must be water and electricity. Some areas have a big number of houses and yet there are limited numbers of SWH units. In certain cases, roof structures are very weak for mounting a SWH unit. There are often tensions between Councilors and ward committees, and this makes difficult to work in certain areas.

Some key lessons• A key person needs to take overall responsibility• Officials need to provide oversight with regards to suppliers

• The standard specifications must be aligned with bylaws• The contract and agreements entered into must have penalties

• Housing plans must cater for SWH unit installations

• Water inspectors need to be part of the project from the initial stages.

Lessons Learned from ESKOMParticipation on the ESKOM SWH programme

There are participating suppliers on the ESKOM databse and these include companies who register the product on the programme. The suppliers are responsible for the guarantee of the product. They are also responsible for the import or manufacture and testing of the product at SABS. Distributors do not import or manufacture a product. However, they have a direct relationship with the guarantee holding company (i.e. participating supplier) and sells and/or installs their system. They are responsible for the installation guarantee. They must also register qualified installers on the programme

Supplier registration on the programmeSuppliers must apply for document packs from Auditors. Once they obtain all relevant documentation, they must then register with SESSA, and obtain full current SABS test reports that are valid for 12 months. The supplier must then submit complete registration packs to the facilitating Auditor. Successful applicants are accredited and a welcome pack is issued. ESKOM loads the new supplier details on their website and thereafter, the supplier may now offer rebates.

Distributor and Installer registrationThe supplier must be accredited with the programme and must register all systems for participation on the programme. The accredited supplier must authorize distributor to sell and install system. The authorization letter must be submitted on a letterhead. The Distributor must register all qualified installers and provide proof of qualification and these will be authorized to sign off installation.

Programme requirementsIn terms of system requirements, the SWH units should have valid SANS Test Reports valid for six months or a valid SABS Mark of Approval bearing tests for mechanical, thermal and electrical safety. The collector and storage vessel must carry a minimum of 5 years guarantee. The system must be installed with a timer/load management device in the case of electrical back up..

With regards to installation requirements, the SWH must comply with the National Building regulations, SANS (installation of SWH), all electrical regulations, SANS (The installation, maintenance, replacement and repair of fixed electric storage water heating systems, installation manual, and other relevant standards, regulations and legislation such as local bylaws.

Installations to dateKZN is ranked the third in the country in terms of SWH installations to date. Leading the pack is Gauteng and the Eastern Cape. This includes ESKOM and DOE funded installations. With regards to the total number of Solar Geysers installed per district municipality in KZN, eThekwini Municipality is leading with approximately 16550 installations to date, followed by uThukela (4904), Sisonke (3718) and uMkhanyakude (3545).

Requirements for a valid claimAll claims must be submitted for installed systems only. Houses must have running water and electricity and hence proof of electric connection and address is required. Roof structures must be able to support the weight of the system. The system must be registered on the ESKOM SWH programme. The Suppliers and installers must be registered on the ESKOM SWH programme for that particular system. Full customer documentation must be submitted per installation and per home. Claims will only be paid up to a maximum quota allocation per month/company.

Claim irregularities

• Municipalities should watch out for the following:• No installations and false documentation• Incomplete installations• Duplicate/triplicate claims on barcodes/addresses/ customer details• Non existent addresses• Incorrect system installed• Non performing systems• Physical address validation for Audits

Quality of installationsThe most common technical audit issues include:

• Loose bolts and nuts on the frame work• Plastic pipes used on the outside instead of copper pipes• Insulation not installed on the water pipes• ESKOM barcodes not used on the equipment/customer DB• Water proofing not done properly resulting in water leaks at the geyser and pipe work – holes left open• Water pipes not supported• Tank and collectors not facing the optimum direction/ angle• Incorrect timer setting, SWH system and pipes not earthed properly• Water pipes not connected• Systems not properly/safely secured to roofs• Mixing valves and stop valves not installed• No collars on filler tanks• Filler tanks leaking and filler tank valves not working

Poor installations illustrationSome common poor installations include:

• Filler tank leaking excessively• Drilled hole left opened• Filler tank with no collar• Filler tank with no overflow pipe and lid• Plastic pipes used and poor insulation • Loose and plastic pipes• Unit not properly/safety secured to roof• Skew installation/plastic pipes/loose pipes/no insulation• System leaking• Unit not properly/safely secured

• Roof structure collapsing due to weight of unit and no support• Plastic outside building

SafetyIn terms of the OSH Act, general duties of manufactures and other regarding articles and substances for use at work. Any person who designs, manufactures, imports, sells or supplies any article for use at work shall ensure, as far as is reasonably practicable, that the article is safe and without risks to health when properly used and that it complies with all prescribed requirements. Any person who erects or installs any article for use at work on or in shall ensure, as far as is reasonably practicable, that nothing about the manner in which it is erected or installed makes it unsafe or creates a risk to health when properly used on any premises.

Positives of the programme• The industry has grown• SESSA has also grown• The SABS has increased its capacity and standards development• PIRB has become a more formalized plumbing structure• Training institutions have developed.

Carbon Finance: An OverviewIn terms of the Clean Development Mechanism (CDM), developing countries which does not have an emissions cap can register CDM projects to earn CERs. These CERs can be sold to countries who do have an emissions cap in order to meet their cap. A baseline and project scenario is established to determine the emissions cap. The baseline scenario helps in establishing GHG emissions prior to CDM project implementation. The project scenario indicates GHG emissions post CDM project implementation. During this scenario, GHG emissions are reduced and the emission reductions will result in CERs. The CERs are used as a base to determine the total emissions cap of a country that has stipulations under the Kyoto Protocol. The CDM programme aims to decrease validation, verification and registration costs. It can support smaller community development projects.

The eThekwini Municipality has established a Coordinating and Managing Entity (CME) to deal with project management issues. The CME communicates with the CDM Executive Board; maintains and electronic database; produces a monitoring report; selects the SWH suppliers used; selects the heat pumps suppliers used; and is also involved in one of the CPAs. As mentioned earlier, the idea of government is to install SWHs and heat pumps at residential facilities throughout South Africa. It is hoped that this will reduce the amount of grid electricity or fossil fuel required for water heating.

In terms of the project methodology that is employed, the focus is on projects that use renewable energy technologies, such as SWHs that displaces fossil fuel use; and activities that encourage adoption of energy efficient equipment and appliances at many sites. At least 1% of the same type of installation is checked for continuous operation. Inlet and outlet water temperature, electricity consumption and hot water flow rate are monitored.

A database is created and includes the name of owners; contact details; home type; location of installation; number of units installed; technical details on unit to be installed; details about household; details about the existing water heating method; details on whether household is grid connected and has a water connection; date of installation; name of supplier; and serial number.

In terms of participation, suppliers must not have their own Carbon Program. Households need to sign ceding form. The municipality needs to set up monitoring station for each type of SWH as well as set up a maintenance team for a 10 year period. A memorandum of understanding (MOU) is signed by all parties involved and it outlines the roles and responsibilities.

Introducing a Municipal Toolkit for SWHMorgan circulated a CD that contains the Municipal Toolkit for the SWH programme that municipalities can use. The toolkit consists of generic service level agreements for low cost SWHs with ESKOM specifications and checklists; penalty clauses; pilot houses; targets and limits; databases (with address issues and GPS coordinates); and panel registration documentation (which is open ended).

Way Forward and ImplementationThe estimated total installations in KZN is 33 028 SWH units with eThekwini, Sisonke and uMkhanyakude topping the group. Although full participation of KZN municipalities was not achieved at the workshop, all the municipalities need to gear up in presentation of the rollout of the SWH programme leading to 2015.

Lessons Learned from the workshop• There needs to be service level agreements (SLAs) between municipalities and service providers. This will ensure that municipalities are directly involved in the implementation of the projects. The municipalities should be in a position to do inspections on a regular basis and advise service provider accordingly.

• Engagement with community prior to the implementation of the project is critical. Lessons can be learned from the eMnambithi Municipality. In implementing their projects, they brief the community about standards, expectations and provide contact numbers to be used in cases where there are problems.

• The rollout of the SWH programme should benefit the poor of the poorest, and such beneficiaries should be listed on the “Indigent Register.”

• Municipalities should consider multiple service providers in implementing the SWH programme. This will ensure that if one service provider does not perform, it will not affect the whole programme.

• Subcontracted service providers should not be allowed to do “piece jobs” in the same communities where SWH projects are being done. This affects the implementation of the project because the sub contractors concentrate on the “piece jobs” and neglected the implementation of the SWH progress. This should be detailed in the SLAs with service providers.

• ESKOM must withhold payment to suppliers until audits are completed. This will ensure that service providers are accountable for their workmanship.

• Both ESKOM and municipalities should work together to develop a long tern maintenance programme.

The existing ESKOM helpdesk needs to be promoted extensively for the benefit of communities. In fact, ESKOM, the municipalities and service providers need to partner to provide an efficient service.

• Municipalities need to ensure that there is sufficient water supply for the indigent households. Water costs should be monitored.

• ESKOM and municipalities should insurance for the SWH units and consult with SABS in this regard. The Greater Kokstad Municipality has experienced insurance claims as a result of faulty SWH units that led to damaged property.

• The planning and orientation of houses is important. The position of the SWH units should be able to face the sun in summer and in winter.

Viewing Sites with Installations

In concluding the workshop, the eThekwini Municipality took delegates on a site tour. The purpose of the tour was to experience good and bad installations that are available in one of the sites. The community, generally, welcomes the installation of the SWH units because it improves their way of living. Hot water is now easily accessible. Politicians on the other side are also happy because the implementation of the SWH projects is contributing significantly to service delivery whilst mitigating climate change. However, there are pros and cons with regards to these projects. Municipalities need to address the challenges and prepare for the rollout of the vision 2015 SWH Programme as pronounced by the President in his State of the Nation Address. 

Some contact detailsFacilitating auditors (supplier quries):eskomwhproject@deloitte.co.za021-427 5450

Solar Water heating Help DeskTel: 011 – 800 4744Email: solar@eskom.co.zaWebsite: www.eskom.co.za/idm

Derek MorgansThekwini Energy Office031 – 311 1139morgand@durban.gov.za

Abigail KnoxKZN Sustainable Energy Foruminfo@kznenergy.org.zawww.kznenergy.org.za

Fezile NjokweniMunicipal Institute of Learningnjokwenif@durban.org.zawww.mile.org.za031 – 322 4521 

APPENDIXThe parking lot

• Direct municipal involvement from onset.• Setting up SLAs to manage process.• Community involvement: setting up a task team• Mpofana: If Mayoral project is launched, must involve technical officials. Must be mainstreamed.• Umfolozi: also proposed SLAs and direct involvement of municipalities.• Roof breakages/leaks not dealt with by service providers in time• Newcastle: Suggest not to necessarily have one service provider• Extent of delivery not sufficient• Need overflow valves• Need to involve DWAF in this ground breaking process• eMnambithi: audit/assessment/briefing with the community before installation – weekly inspection and monitoring.• Caution: managing service providers on ongoing basis• Must factor in availability of water – policy issue – 6kl• ESKOM to establish a fault/help desk to resolve issues with municipalities• Use of local installers for quick response time• Kokstad: poor after installation support; lighting strike: insurance claims; need for technical audits (suppliers are accountable); longer term solutions are required in terms of maintenance; must tripartite MOU.

General Issues• SCM impact

• Training of local community o Role of FETs o Private sector partnerships o Indigent policy

• Post ten year disposal

• Technical? Tube breakage – after sales service

• Policy required around insurance due breakages

• Community

• LED

• Installation – standards and specification

• Procurement

• Maintenance