Eskom hike spurs solar rush
The shock following Eskom's proposed rate hike has motivated South African home-owners to seek a viable alternative - that of solar energy.
Teljoy Group chairman, Theo Rutstein, says since the publication of the Eskom proposals his company has been receiving more than 300 enquiries per day. “Initially people thought it was a good idea to go solar, but few people were prepared to dig into their pockets to pay for it,” he says.
Eskom has proposed a 45% compounded increase annually for the next three years, stirring consumers to action as they realise a bill of R1 000 per month will increase to R3 000 per month over the next three years. For consumers looking for methods of saving electricity, solar water heating seems an obvious choice, according to Teljoy Solar.
“It is generally recognised that heating water accounts for between 30% and 50% of an average household's electricity consumption, so the installation of a solar water geyser will effectively offset the proposed Eskom hike,” notes Rutstein.
When Teljoy entered the solar industry nearly two years ago, says Rutstein, business was initially slow, despite the fact that most people thought solar was a good idea. “Not only in terms of saving money, but also because it reduces carbon emissions and is good for the environment.”
The company soon realised the dichotomy between the desire to install solar, and the willingness to pay for it, and introduced a Green Credit scheme. Under this scheme, payment for the solar system would be effected over a four-year period, with the monthly instalments being offset by the savings in electricity usage.
Rutstein notes that once the Eskom tariff hike goes through, the pay-back period on the solar system will be significantly reduced. “If the Eskom price hikes of 45% per annum over the next three years are approved, and even if one assumes there will be no inflation-linked price hikes thereafter, a customer now spending R1 000 per month on electricity will save well over R125 000 over the next 10 years by installing a solar system now.
“This is based on the assumption that water heating accounts for only around 30% of the household's electricity bill.”
Rutstein says many of the new customers are people in their mid-to late 50s who will retire in the near future and are concerned about the cost of electricity after retirement.
“It's unfortunate that the lifestyle of South Africans is inevitably going to be affected over the next few years because of electricity supply problems. If the Eskom tariffs are not allowed, there will inevitably be power outages which will make life very uncomfortable,” notes Rutstein.
“On the other hand, the higher cost of electricity will also negatively affect lifestyle through a reduction in disposable income.”