Synopsis for Part V-3
Approximately half of the global and South African national energy demand is used for heating purposes. At present, this demand is served largely by conventional energy sources such as oil, gas and coal. Globally, however, only 1.2% of heating demand in buildings is covered by solar energy, but 10.3% of the global energy consumption for heat is through renewable sources. The estimated total cumulative capacity of solar thermal collectors in operation worldwide by the end of 2016 reached 456 gigawatts-thermal (GWth), corresponding to 19% of the global renewable energy capacity.
The addition of 36.5 GWth in 2015 corresponds to approximately 20% of the total renewable energy additions. This capacity increased by more than 5% despite a market slowdown in China (which accounts for 77% of all new installations) and Europe. The global distribution of type of collector is a bit skewed by China’s majority share of 71% of the global solar thermal market, which consists of a majority share as high as 91% of the global evacuated tube collector (ETC) market. Regarding the market share flat plate collectors dominate the total market share, with the exclusion of China’s market share.
Locally, South Africa stands as the most sophisticated and mature solar thermal market in Africa. The presence of longstanding metal extruding and glass manufacturers in South Africa, coupled with government rebates for locally made tanks and collectors means the market continues to grow. Certain high-tech items continue with most evacuated tube collectors used in South Africa being of Chinese origin, while locally-made flat plate collectors being able to compete with systems coming from abroad.
The period of 2008 to early 2015, the growth rate stayed consistent with a steady increase of approximately 9.4% per annum after decreasing the last few years. The addition of 89MWth in 2016 corresponds to approximately 8% of the total renewable energy additions, up from 4% the previous year. Thermal heating for industrial processes has been limited to sectors such as the sugar, and pulp and paper manufacturing sectors, where waste is used to generate heat.
Drivers of the solar thermal industry exist in such as higher costs and volatilities associated with fossil fuels when compared to solar thermal systems, government based incentives such as a tax rebate for consumers willing to employ more renewable energy sources and the governments initiative to purchase the output from qualifying renewable energy generators.
The solar water heater industry, which is dominated by the residential market segment, is perceived to be growing in non-residential market segments such as in the agri-processing sector. It is now compulsory for new construction to apply non-fossil fuel-derived energy to meet at least 50% of the building’s water heating load, under the Energy Efficiency Building Regulation, which includes public buildings.
The South African National Accreditation System gives formal accreditation for all aspects of quality insurance, including laboratories, certification bodies, inspection bodies, proficiency testing scheme providers and good laboratory practice test facilities although there being only one test laboratory and one certification body in the country, i.e. the South African Bureau of Standards, seems to contribute to high test costs.
There has always been some activity on installer training and more recently formally through the Southern African Solar Thermal Training and Demonstration Initiative (SOLTRAIN). Other supporting institutions for Solar thermal include the South African National Energy Development Institute (SANEDI), the Southern African Solar Thermal and Electricity Association (SASTELA), the Centre for Renewable and Sustainable Energy Studies (CRSES), the Sustainable Energy Society of Southern Africa (SESSA) and the Western Cape energy security game changer initiative.
Approximately half of the global and South African national energy demand is used for heating purposes [IEA, 2012; Holm, 2015]. At present, this demand is served largely by conventional energy sources such as oil, gas and coal [UK GDBE&IS, 2013; U.S. EIA, 2016]. Globally, however, only 1.2% of heating demand in buildings is covered by solar energy [IEA-SHC, 2014a], but 10.3% of the global energy consumption for heat is through renewable sources [REN21, 2018] According to the 2018 report from the IEA Implementing Agreement on Solar Heating and Cooling (IEA-SHC), the estimated total cumulative capacity of solar thermal collectors in operation worldwide by the end of 2016 reached 456 gigawatts-thermal (GWth), corresponding to 653 million m2 of collector area and 19% of the global renewable energy capacity [IEA-SHC, 2018]. Following its rapid growth prior to the 2008 financial crisis, a decrease in the growth rate was seen for 2009, and again in 2014 and 2015, affected by economic recessions and a decline in the construction industry, as shown in Figure 1, respectively which in turn can be contributed to some countries that were affected by economic recessions and a decline in the construction industry.
Figure 1: Growth rate of solar thermal heating
The addition of 36.5 GWth in 2016 corresponds to almost 20% of the total renewable energy additions. This capacity increased by more than 5%, as shown below in Figure 2, in 2016 despite a market slowdown in China (which accounts for 77% of all new installations) and Europe [ESTIF, 2015].
Figure 2: Global cumulative solar thermal capacity
The deployment of solar thermal heaters in South Africa was driven by the Government’s commitment to install one million solar water heaters in the residential market by 2014/15 to relieve the pressure on the national grid. Incentives were in place from the launch in 2008 to early 2015, with rebates available for between 25% and 45% of the system cost, depending on the system performance and cost. At least 70% of the newly installed installations during this period took place through the local utility’s rebate programme [LTE Energy, 2012].
The roll-out was supported by a rebate scheme which was implemented by private companies. The solar water heater programme covered a broad range of markets which were categorised within six different market segments: upper- and middle-income, low-income households, new-build homes, the geyser replacement market, and an industrial and commercial market. Solar thermal heaters for the low-income housing sector were executed through the social housing projects, funded by the government.
3. Global overview
The global distribution of type of collector, as shown in Figure 3, is a bit skewed by China’s majority share of 71% of the global solar thermal market, which consists of a majority share as high as 91% of the global evacuated tube collector (ETC) market. Even with the exclusion of China’s figures for 2016, as shown in Figure 3, the global adoption of evacuated tube decreases from 71.7% to 34.3%. With the exclusion of China’s market share, flat plate collectors dominate the total market share.
Figure 3: Cumulative global share of collector type by 2016 (left); Global share of collector type, excluding China for 2016 (right)
4. Overview of local industry
As the government of South Africa aims to reduce dependence on coal by the year 2050, the country stands as the most sophisticated and mature solar thermal market in Africa [Warren-Rose, 2013]. The presence of longstanding metal extruding and glass manufacturers in South Africa, coupled with government rebates for locally made tanks and collectors means the market continues to grow.
Certain high-tech items continue to be imported such as the selective absorber coating systems from German manufacturers. Most evacuated tube collectors used in South Africa are of Chinese origin, as they are offered at cheaper prices than their European counterparts while locally-made flat plate collectors are able to compete with systems coming from Europe, Middle East, Israel, Turkey, the United States and even some coming from China.
In 2008, the South African government launched a plan to install a million solar water heaters by 2013, but the market did not cooperate, despite the incentives [WWF, 2017]. By 2013, approximately 61% of all collector installations were unglazed panels as shown in Figure 4. The current market is divided between flat plate collectors installed on upper and middle class residential homes and lower cost evacuated tubes installed on the South African government’s social responsibility programmes or social corporate investment programmes.
Figure 4: Total water collectors in operation by the end of 2013 (MWth) [WWF, 2017]
To date, there are seven industrial-scale installations that utilise solar energy for process heat [Joubert, et al., 2016]. With the potential of agri-processing for solar thermal application being clear, some of the other installations include evacuated tube collectors used in the automotive industry such as at the BMW manufacturing plant in Rosslyn, Pretoria. Another would be flat plate collectors used in the food and beverage industry such as with the Cape Brewing Company in Paarl. Competition for the installation of thermal systems for process heat remains healthy as at least five known installers can be employed nationally.
5. Maps & plants
The concentrated solar thermal plants have been employed in the Northern Cape and surrounding Free State area.
Table 1: Operational Concentrated Solar Power plants in South Africa
|Power plant||Type||Capacity [MW]||Town and province||
|Bokpoort||Solar CSP||50.0||Grobblershoop, Northern Cape||
|Boshoff Solar Park||CSP through PV||60.0||Boshof, Free State||
|Karoshoek Consortium||CSP – Linear Fresnel||100.0||Kimberley, Free State||
|Xina CSP South Africa||CSP||100.0||Pofadder, Northern Cape||
|Khi Solar One||Solar CSP||50.0||Grobblershoop, Northern Cape||
|KaXu Solar One||Solar CSP||100.0||Pofadder, Northern Cape||
Figure 5: Concentrated Solar Power area’s [Eskom, 2015b]
6. Local market size and dynamics
South Africa has a growing solar thermal market which accounts for 24% of the country’s total cumulative renewable energy capacity. The total cumulative capacity of solar thermal collectors is in the order of 1335MWth, corresponding to approximately 1.9 million m2 of collector area. Figure 6 shows the provincial share of domestic solar thermal installations.
Figure 6: Provincial share of domestic solar thermal installations
7. Statistics related to solar thermal locally
The South African solar thermal market was not affected by the global economic crisis, but although incentives were provided during the period of 2008 to early 2015, the growth rate stayed consistent during this period with a steady increase of approximately 9.4% per annum as shown in Figure 7 after decreasing the last few years. The addition of 89MWth in 2016 corresponds to approximately 8% of the total renewable energy additions, up from 4% the previous year, severely affected by the growth of renewable through the employment by the Independent Power Producers. The majority of systems are for domestic hot water use (including hospitals) and staff ablutions with a small contribution of 7% for process heat and 4% for cooling [WWF, 2017]. Glazed flat-plate collectors are the most common type of water collector used in South Africa mainly for domestic hot water heating. Thermal heating for industrial processes in South Africa has been limited to sectors such as the sugar, and pulp and paper manufacturing sectors, where waste is used to generate heat.
Figure 7: Local cumulative solar thermal capacity
A cross reference to Brazil and Australia, both of which have similar economies and solar irradiation to South Africa, reveals that the market share for unglazed collectors is decreasing when compared to evacuated tube and flat plate collectors for South Africa, Brazil and Australia, and flat plate collectors are on the rise. In South Africa, the market share of evacuated tubes are increasing, where in Brazil and Australia, it is almost non-existent as depicted in Figure 8.
Figure 8: Cumulative distribution of collector type by 2016
8. Economics related to solar thermal
The share of heat provided by solar energy (solar fraction) of systems in South Africa (60 – 80%), [ESI, 2017], can be used to estimate cost savings of the system once it has been paid off. After this, the system can continue to provide free energy. Generally, solar thermal systems supplement rather than replace traditional fuel sources.
8.1 Key drivers
The cost of the fossil fuels, with consideration to increasing carbon tax, to be replaced by solar thermal technology also plays a part in decision making as the costs of solar thermal systems still vary. With an average price of ZAR 7692/m2 for solar thermal systems [Janse van Vuuren, Jezile, 2017], the business case for substituting some fuels with solar thermal becomes reasonable. The payback period for solar thermal systems used as substitutes for fossil fuels is in the range of 5 years with a lifespan expectancy of about 20 years [WWF, 2017]. With respect to long term planning, solar thermal yield and maintenance costs are relatively constant, while the oil price and its related fuels (HFO, paraffin, diesel, petrol & LPG) are inherently volatile thus, a switch to solar thermal may mitigate against future volatility of fossil fuels.
The South African government’s income tax rebate system as part of the National Energy Efficiency Strategy (NEES) assists companies looking to utilise more sustainable energy sources [DoE, 2015]. Solar thermal installations could qualify for the 12B tax incentive, allowing for accelerated depreciation of the capital cost for tax purposes
As from 26 March 2009, an obligation to purchase the output from qualifying renewable energy generators at pre-determined prices based on the levelised cost of electricity [IEA, 2011]. With respect to solar thermal technologies, the feed in tariff stands at ZAR 3.14/kWh for concentrated solar power (CSP) trough and ZAR 2.31/kWh for CSP tower with storage. This development has created a viable incentive for utilising solar thermal technology in energy production.
8.2 Key barriers
Key challenges for wider deployment of solar thermal systems include the complex process and associated cost for integration in existing homes and the competition with heat pumps and solar photovoltaic systems [IRENA, 2015c; WWF, 2017]. With that said, limited knowledge in the industry on solar thermal efficiencies (ranging from 40% to 60%) generally paints the technology as new, and hence without having been experienced, when compared to the more well-known Photo Voltaic (PV) systems (with an efficiency of about 20%) [Janse van Vuuren, Jezile, 2017]. The higher costs of solar thermal systems in South Africa when compared to the rest of the world also act as a barrier to market growth. As the South African Bureau of Standards (SABS) focuses on only certifying solar thermal systems locally instead of specific components, local industry is not able to compete with foreign manufacturers.
There are 13 companies manufacturing solar thermal systems flat-plate panels in the country: five have established their own supplier network while the other eight manufactures supply to the market themselves [LTE Energy, 2012]. Evacuated tube collectors are not manufactured in South Africa [LTE Energy, 2012]. Given the average collector area of approximately 4m2, the tank size corresponds to 150 and 200 litres systems. Most of the solar thermal systems manufactured are supplied to the domestic market as export of solar thermal systems manufactured in South Africa is decreasing [LTE Energy, 2012].
37 international manufacturers produce solar thermal systems for the domestic market [LTE Energy, 2012]. More than half of the foreign companies supplying solar thermal systems in South Africa are from China with other country suppliers including Greece, India, Israel, Turkey, Australia, Taiwan, and South Korea [LTE Energy, 2012]. Evacuated tubes are sourced from manufacturers mainly located in China and Germany [Chang et al, 2011]. The penetration of evacuated tubes can be attributed to the lower cost than local manufacturers.
Over 650 suppliers are registered with Eskom however, the majority of these are once-off suppliers that serviced specific towns or areas [LTE Energy, 2012]. These numbers have decreased after the ending of the rebate program.
There are approximately 170 registered independent installers in the country [LTE Energy, 2012].
9.5 Storage tanks
As far as storage tanks are concerned, a range of 100 to 1 000 litres products are available in South Africa. This market encompasses 17 local manufacturers and 18 international manufacturers [LTE Energy, 2012].
9.6 Solar thermal systems for industrial applications
There are at least 89 large (> 10m2) solar thermal systems in South Africa according to the most comprehensive source available [Joubert, et al., 2016]. There are at least five known installers for industrial-scale solar thermal systems nationally.
10. Commercial landscape
Given the nature of deployment of solar water heaters, this industry to date has been dominated by the residential market segment; however, the application of solar water heaters in non-residential market segments are perceived to be growing, particularly as far as greenfields projects are concerned in lieu of the SANS 204 regulations and emerging markets such as in the agri-processing sector.
It is now compulsory for new construction to apply non-fossil fuel-derived energy to meet at least 50% of the building’s water heating load, under the Energy Efficiency Building Regulation, which includes public buildings.
The South African National Accreditation System gives formal accreditation for all aspects of quality insurance, including laboratories, certification bodies, inspection bodies, proficiency testing scheme providers and good laboratory practice test facilities. There is only one test laboratory and one certification body in the country, i.e. the South African Bureau of Standards, which seems to contribute to high test costs [IRENA, 2015b].
There has always been some activity on installer training and more recently formally through the Southern African Solar Thermal Training and Demonstration Initiative (SOLTRAIN).
The income tax rebates, such as 12L which have been implemented to promote energy efficiency, but unfortunately this does not apply to the solar thermal industry. Solar thermal installations could, however qualify for the 12B tax incentive, allowing for accelerated depreciation of the capital cost for tax purposes [WWF, 2017].
Supporting institutions for Solar thermal are as follows:
10.1 South African National Energy Development Institute (SANEDI)
The South African National Energy Development Institute is responsible for achieving the objectives of the National Energy Efficiency Strategy (NEES) and serves as an implementing agency of the South African government, in particular of the Department of Energy (DoE), created to assist the country to reach its energy goals. In 2011, the two public research agencies South African National Energy Research Institute (SANERI) and National Energy Efficiency Agency (NEEA) were merged into the new South African National Energy Development Institute (SANEDI). It focuses on awareness-raising and increased uptake of “green” energy. Its portfolio includes data and knowledge management on energy, energy efficiency, fuel technology, low-carbon energy and transport, CCS, as well as energy end use and infrastructure.
- National Energy Efficiency Agency (NEEA)
Created in 2006 as a wholly-incorporated division within the CEF Group, it was responsible for the implementation of demand side management and energy efficiency projects in the country; the management of strategies for improving efficiency; awareness-raising campaigns and training programs in energy efficiency and co-operation with all agencies involved in the sector to ensure best practice.
10.2 Southern Africa Solar Thermal and Electricity Association (SASTELA)
The Southern African Solar Thermal and Electricity Association aims to make a connection between concentrated solar power (CSP) energy technology, people and the society to realize a cost effective, cleaner, low CO2 emissions energy future for South Africa and future generations of Africa.
The Integrated Resource Plan implemented by South Africa aims at producing 21534 MW of new renewable energy generation by 2030 with 1200 MW of this energy generated by CSP. With that in mind, the CSP technologies advocated for by SASTELA provide a viable way in which to reach national goals.
10.3 Southern African Solar Thermal Training and Demonstration Initiative (SOLTRAIN)
The Southern Solar Thermal Training & Demonstration Initiative (SOLTRAIN) is a regional initiative that supports solar thermal development in the SADC region [WWF, 2017]. The initiative is funded by the Austrian Development Agency and OPEC Fund for International Development (OFID). SOLTRAIN is currently in its third phase with substantial progress made in the first two phases.
Some of key successes to date include:
- More than 120 people have been trained in solar thermal systems.
- 127 solar thermal demonstration systems have been installed across the residential, commercial and industrial markets across SADC.
- SOLTRAIN has had workshops aimed at industrial scale applications specifically to help uptakers understand solar thermal systems.
At a more strategic level, SOLTRAIN has helped develop solar thermal roadmaps for South Africa, Namibia and Mozambique and provided support in 2016 for the upgrading of Stellenbosch University’s collector test facility to European standards so that commercial tests could successfully be performed.
The current third phase of SOLTRAIN (2016–2019), aims to train 500 persons on the design, installation and maintenance of solar thermal systems and, to add 70 operational and quality checked solar thermal systems
10.4 Centre for Renewable and Sustainable Energy Studies (CRSES)
The Centre for Renewable and Sustainable Energy Studies (CRSES) acts as route into the University of Stellenbosch under the general field of renewable energy. The centre’s goals include the building of human capital and institutional capacity in the field of renewable solar energy, deepening knowledge and research in renewable energy and transferal of technology and, simulating innovation and enterprise in the field of renewable solar energy.
The centre, under the faculty of engineering at Stellenbosch University, offers higher education programs aimed at the stated activities of teaching, research and market transformation. The centre also carries out research development work under the guidance of a management board consisting of members from different sectors including academia, non-governmental organisations, industry, utilities and government.
10.5 Sustainable Energy Society of Southern Africa (SESSA)
The non-profit organization, referred to as the Sustainable Energy Society of Southern Africa (SESSA), was established in 1974 with the goal of creation and continued growth of an authoritative renewable energy forum in Southern Africa. It has sought to achieve this through partnering with industry, scientists, researchers, developers and the general public. Its precise objectives include the following:
- to promote and increase the use of renewable energy with informal education, demonstration and information dissemination to end-users and other decision makers of all levels.
- to establish the society as the main regional information centre in close co-operation with similar initiatives.
- to facilitate in the creation and maintenance of appropriate standards for products, systems or methods of training.
10.6 Western Cape Energy Security Game Changer
The Western Cape energy security game changer initiative aims to ensure the provision of sustainable power sufficient to households and businesses in the province of the Western Cape (WC). It aims to achieve this by contributing at least 10% of the province’s electricity needs by year 2020 and thereby reducing the demand from Eskom.
The initiative is focused on the following:
- Enhanced uptake of rooftop Photo Voltaic (PV) energy and the supply of 135 MW to WC electricity by year 2020.
- Enhanced uptake of efficient water heaters (EWH), including an increase of up to 155000 solar water heaters (SWH) by year 2020.
- Reduced energy consumption in both public and private buildings by year 2020 and a 30% reduction in energy consumption in government buildings.
- Enhanced load management by optimally managing the electricity grid to reduce peak demand and minimise the likelihood and impact of load shedding.
Rollout of Independent Power Producers (IPPs) and Liquefied Natural Gas (LNG) as a means of diversifying WC electricity supply by year 2020.
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