South African business balks at solar rebates

JOHANNESBURG -- As South Africa prepares to kick off the COP17 climate change conference in Durban in less than two weeks, one battle between private business and the public sector here illustrates the difficulties of coordinating the two around sustainable development, even when they have the same goal. South African manufacturers of solar water heaters have run into hurdles put in place by a government policy meant to help.

In 2008 South Africa, through the state-owned power company Eskom, put together a massive $608 million rebate program for the purchase of solar water heaters. The aim was to spur investment in sustainable technology and decrease the carbon emissions associated with traditional water heaters.

But like so many other government programs here, good intentions have run headlong into a bloated bureaucracy and endless red tape.

Local producers say that they're being left out in the cold by the rebate program. The rebates are offered to consumers who purchase solar water heaters from a pre-approved list compiled by the South African Bureau of Standards.  South African manufacturers say the bureau, which is separate from Eskom, set up a complicated review system that favors imports over locally produced components.

The manufacturers claim that this process makes the program ultimately counterproductive - damaging the local green economy rather than facilitating its growth.

Francois du Plessis, CEO of development agency Green Cape, told the Mail & Guardian,"We are paying taxpayers' money in rebates to import products."

For its part, Eskom has acknowledged the problem and proposed a new rebate system that takes into account locally produced solar water heaters. However, a timetable for implementing these changes has not been set.

The proposed plan is little solace for local supplier Solar Dome. The company has manufactured solar water heaters in South Africa for over 40 years.  Yet three years into a rebate program that has the goal of expanding the industry, Solar Dome is downsizing ("streamlining," according to the statement on their website) its Western Cape production facilities.

Still, Eskom's rebate program has yielded some successes. The size of the rebates was increased after a modest start of 2,525 claims through its first two years. Over the following year and a half, the number of applications for the larger rebates jumped to 64,000.

That number falls well below the one million water heaters that the government envisions.  The rebates are part of a much larger government initiative to get South Africa to reduce its carbon footprint by 34 percent by 2020.

The rebate program is set to run through 2013.

Photo: Abri le Roux/Flickr

This post was originally published on Smartplanet.com