1. Presentation outline 1-Confidential- Solar Water Heating Update Select Committee on Economic Development 25 January 2011 9/20/2015

2. Presentation outline 2-Confidential- Background

3. Presentation outline 3-Confidential- Background

4. Presentation outline 4-Confidential- Experience with Tariff Based Rebate Program - Eskom 9/20/2015

5. Comments from market on rebate programme 5 “We are currently averaging 100 – 200 per month (reflected in Eskom stats)” - One big national player “Burst geyser is not good time to sell SWH” “Rebate programme just isn’t doing it for market” “Market needs a serious shake-up” “It would be embarrassing to give you our sales numbers” 3126 installed on Eskom rebate from Jan 2009 – Apr 2010 Average for new rebate level (Feb 2010 to April 2010) = 443 units per month

6. Presentation outline 6-Confidential-9/20/2015 ** August shows total figures since programme inception. August figures for residential and Low pressure not split Update October figures for Eskom’s Standard residential claims not yet available Experience with new diversified approach Cumulative total per month

7. Presentation outline 7-Confidential-9/20/2015 Municipal areas with active roll-out programmes (using Eskom rebate) MunicipalityRoll-out Start date Installed as at 20 Jan 2011 NMBM20-Jul-1013006 Mossel Bay27-Sep-10300 Saldanha4-Oct-10500 Kroonstad1-Sep-101800 Mangaung (Bloemfontein)27-Sep-101800 Potchefstroom27-Sep-101600 TheewaterskloofOct 2010 600 EthekwiniJan’ 2011400 EkurhuleniDec’ 2011500

8. Presentation outline 8-Confidential-9/20/2015 Other projects - Solar Water Heating CompanyInitiative implemented BMW6500 litre per day system SABS Rosslyn Change rooms8 units Western Cape Environmental Affairs 1000 units (in Darling) Japanese embassyInstalled 410 solar panels which includes water heating needs Hotel Da Vinci (Sandton)30000 litre per day system

9. Presentation outline 9-Confidential-9/20/2015 Market Activity: Rebated Solar Water Heating As at 31 Dec 2010 there are presently: 108 accredited suppliers, 245 registered distributors and 124 registered independent installers From April to December 2010, 26 768 units were installed whilst a cumulative total of 30 974 has been achieved since the rebate programme kicked-off in November 2008. The above figures exclude systems that have been installed but not yet claimed by programme participants.

10. Presentation outline 10-Confidential-9/20/2015 Provincial breakdown – Rebate Program

11. Presentation outline 11-Confidential-9/20/2015 Municipal breakdown – Fiscal Program Program funded from 2009/10 fiscal allocations (via Eskom) to install a total of 30 768 systems Tshwane (15 094), Sol Plaatje (7 837) Naledi (7 837) Additional funding in 2011/12 (via municipalities) to install more systems MunicipalityRm Sol Plaatje5.0 Sedibeng54.4 Musina54.4 Umsobomvu60.0

12. Presentation outline 12-Confidential-9/20/2015 What is in the pipeline?... Infrastructure structure challenges, especially water reticulation & household plumbing are stalling the rollout especially in Naledi & Sol Plaatje Programme to address hot water provision in rural areas – Managed by Department of Rural Development and Land Reform. Programme to install in government owned residential dwellings – Managed by Department of Public Works. New building regulations will enforce energy efficient practices in new buildings (including SWH and other technologies). The regulation was gazetted for public comment and is in process of being signed off for promulgation by Minister of DTI.

13. Presentation outline 13-Confidential-9/20/2015 What is in the pipeline?... Tax incentive for implementing energy efficiency, as per the regulations issued under the Energy Act: Concurrence of Minister of DTI obtained Conditional concurrence of Minister of Finance obtained Allows companies to fast track energy efficiency, including SWH through tax breaks

14. Presentation outline 14-Confidential-9/20/2015 What is in the pipeline?... Energy Efficiency and Demand Side Management Policy (Standard Offer Model) Minister of Energy pronounced on a Standard Offer incentive scheme that will fund all Energy Efficiency and Demand Side Management (EEDSM) interventions through the electricity tariff. This scheme is aimed at creating an expanded opportunity for attracting the much-needed sustainable financial stimulus into the EEDSM programme. Initially the Standard Offer and the rebate programme will complement each other and merged over time

15. Presentation outline 15-Confidential-9/20/2015 What is in the pipeline?... New building regulations will enforce energy efficient practices in new buildings (including SWH and other technologies such as heat pumps). The regulation was gazetted for public comment towards the end of last year and is in process of being signed off for promulgation by Minister of DTI. Programme to install SWH in government owned residential dwellings – DPW in collaboration with DoE.

16. Presentation outline 16-Confidential-9/20/2015 What are the key challenges that will increase rate of rollout if addressed? Capital cost of components and systems is too high (pricing ranges from R9000 to R35000 for a 200 litre system) Funding for capital costs of units Large uninformed consumer base i.e. lack of consumer awareness of the solar water heating (SWH) benefits Funding for education and awareness campaigns Skills shortages – necessary for safe scaled up installations

17. Presentation outline 17-Confidential-9/20/2015 Training Skills program initiated with CETA, eSETA, donors – unit standards developed and accredited training available for NQF Level 4 : Solar Water Heating plumber NQF Level 2 : Hot water installer Localisation Many companies supply Solar Water Units as importers or as knock-down units and assemble locally. There are initiatives to manufacture locally e.g. factory has been set up in the Eastern Cape (East London IDZ). Discussions are also underway with suppliers to set up other factories in Eastern Cape and Gauteng Addressing the challenges...

18. Presentation outline 18-Confidential-9/20/2015 Localisation... Further CEF (Pty) Ltd. signed an MoU with a Chinese company for setting up a SWH manufacturing plant. Preference will be applied for local systems when rebates are applied for. DTI is spearheading the second Industrial Policy Action Plan (IPAP 2) process which encourages local manufacture of SWH. SABS is scaling up testing capacity, particularly in the regions, to remove any bottlenecks the industry may experience in launching new products Addressing the challenges...

19. Presentation outline 19-Confidential-9/20/2015 Education and Awareness DoE has developed a comprehensive above-and-below-the-line education and awareness plan. We are seeking partnerships with labour, civil society and the private sector to execute the plan. Funding Additional fiscal allocations applied for Tariff-based rebate cemented in Integrated Resource Plan (Nersa will be compelled to make adequate rebates available in the future) Addressing the challenges...

20. Presentation outline 20-Confidential-9/20/2015 Addressing the challenges... Skills Development, Training & Education: There is a need to focus & improve skills development & training in the SWH sector. This can be done with the assistance of the academic institutions, professional training bodies, DPE, & SETAs thus enabling community workers to; Get know-how of the SWH technology i.e. get trained/skilled; Qualify as installers and/or plumbers; Provide after sales services i.e. maintenance Be able to participate in: consumer awareness raising campaigns; and facilitating end-users education. Play a significant role in mobilizing the youth, women, & other vulnerable groups (reducing unemployment).

21. Presentation outline 21-Confidential-9/20/2015 Addressing the challenges... Qualifications: At the end of 2008, new plumbing qualifications were developed to include the solar water heater training. A solar water heating installation uses three levels of plumbing staff: NQF Level 4 : Qualified Solar Water Heating plumber NQF Level 2 : Hot water installer Assistants/Helpers The aforementioned qualifications will come in handy for enhancing employability of the DoE’s Community Workers.

22. Presentation outline 22-Confidential-9/20/2015 Conclusion Target of 1 million systems by 2014 can be achieved, especially when the electricity tariff doubles in 2013 We will exceed threshold of 55 000 systems this financial year Education and awareness building is critical for increased uptake SWH is a key component of the industrial policy action plan to create jobs and has to be intensified Rands Illustrative affordability challenge