ENERGY & DEVELOPMENT RESEARCH CENTRE University of Cape Town Cost-benefit analysis of energy efficient interventions in low-cost housing HARALD WINKLER Lwazikazi Tyani, Randall Spalding-Fecher, Khorommbi Matibe ENERGY & DEVELOPMENT RESEARCH CENTRE University of Cape Town May 2001

INTRODUCTION Objective- to analyse the cost-effectiveness of energy efficiency interventions in low-cost housing from national and consumer perspectives Types of low-cost houses considered were 30m2 RDP house, row house and informal house Types of interventions analysed included: ceilings, roof and wall insulation window size, partition efficient lighting and solar water heating

Large benefits for society

Benefit per household

Not always affordable for poor households 1,000 500 - Rands -500 RDP house Row house CFLs Shacks Solar Water Heaters -1,000 -1,500

Less than R1000 subsidy is needed

Potential financing opportunities Potential financing from climate change mechanisms Carbon revenue could be similar size as subsidy requirement At $10 per ton of carbon, R500 - R1,000 per household over 20 years Requires costs to develop project feasibility monitoring NOT the only financing option bilateral funding multi-lateral development banks Further study on local financing options (EEU)

Conclusion and Recommendations Analyses presented here indicates that investments in energy efficiency are economical and environmentally attractive at a social level Capital subsidy required Interventions with negative costs are “no regret” options Several other EE interventions have potential as CDM projects Opportunity for co-funding initial capital cost Explore funding options