2016/01/201 Presentation to Select Committee on Economic Development Eskom’s Solar Water Heating Programme 28 February 2012

Introduction Government target of 1 million systems installed by end 2014 Approximately 230,000 systems installed through Eskom rebate programme and DORA funded Dx 443. Balance of 800,000 systems requires roll-out of 22,000 systems per month (approx.) Programme will be overseen by Inter-ministerial Project Steering Committee chaired by Director General for Economic Development

Low pressure installations 2016/01/203

High pressure installations 2016/01/204

5 Installations to date

Programme to date installations 2016/01/206

Installations to date 2016/01/207 Above graph represents total installations to date, including installations received but not yet processed. This includes Eskom funded (rebate and contracts) and DoE funded (Tshwane, Sol Plaatje and Naledi).

Lessons Learnt 1.Electricity savings are low in relation to cost – SWH is for job creation and service delivery 2.Quality of installations not always up to standard – re-work was required in many instances 3.Rigorous process controls are required 4.Contracts for on-going maintenance of low pressure systems are required 5.Safety is non-negotiable *SWH – solar water heating 8

2016/01/209 Way forward

The low pressure rebate programme is to be replaced by a contracting approach 1.Government 1.Job creation and sustainability 2.BBBEE 3.Supplier Development &Localisation 4.Equitable share per province 5.Set aside for co-ops 6.Support for disadvantaged groups/communities 7.Certainty that targets will be met 2.Market Participants 1.Predictability and certainty 2.Finance 3.Implementing Agent 1.Rigorous controls and governance 2.Ensure quality installations 3.System sustainability 4.Safety

Roll-out targets 2016/01/2011

Key parameters of future Roll-Out 1.Contracting options 1.Turnkey contracts 2.Separate contracts for the manufacturers and installers 3.Contract with Co-ops 2.Methodology for contract allocation 1.Open tender 2.Conversion of municipal MOU’s into contracts 3.Allocation of systems 1.Completely ‘open’ subject to equitable share across provinces 2.Designated communities / co-ops 3.Allocation process based on local authority submission

Key Parameters Of Future Roll-Out 4.Localisation 1.No local content specification 2.Minimum level of local content in systems (Gate Keeper) 3.Weighting in tender evaluation 5.Sustainability of systems 1.Retention of payments for 3-5 years 2.Guarantees / provisions required 3.Contract for system maintenance in place for installers 4.‘Carbon’ revenues to be leveraged

System specification and installation requirements Safety - Full compliance to OSHACT and Eskom safety requirements Compliance with National standards, SANS standards Installations only on lower LSM (Iiving standards measure) houses Maximum size 150L SWH systems to carry SABS mark approval If required, roofs to be re-enforced Permanent Water connection at the dwelling Water quality within acceptable parameters

Scope of work for installers Installation and maintenance of Solar Water Heaters Development and execution of a 5 year maintenance plan Development of installers and execution of training plan Installer training and skills development by approved accredited solar trainer and SETA approved Minimum of 70% of local community labour to be trained and employed for the installation. Quality assurance Management and auditing of SWH System Call centre establishment and operation Progress reporting Database collection and form administration

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