Greening low-income housing developments

The IDC's Green Industries unit is not focused solely on the industrial and generation side of the equation but has invested quite heavily in supporting the rollout of energy efficient alternatives to South Africa's households too.

One of the big projects under this focus is the R50-million loan (and €10-million guarantee) provided to the Solar Academy of Sub-Saharan Africa (SASSA), which has undertaken to install 190 000 low-pressure direct solar water heaters by February 2013. These are aimed at the low-income housing market.

"The savings potential of using solar energy to warm water is obvious in a country such as ours blessed with so much sunshine," says SASSA chief executive, Chris Nelson. "If rolled out on a mass basis, solar water heaters not only reduce overall carbon emissions, but release capacity on municipal electricity networks to enable further residential and commercial developments."

SASSA has developed a low-pressure water heating system using solar energy, which will be rolled out to low- and middle-income housing projects across seven provinces over the next two-and-a-half years, pending available funding.  An added benefit of the project is that it will be selling carbon credits on the voluntary market through verified emission reductions.  This clean development mechanism was formulated as part of the Kyoto Protocol in 1997 and allows developed nations to buy carbon credits through approved renewable energy projects.

"The funding provided by the IDC will also allow us to finance new projects outside of low-pressure water heaters," says Nelson. "Ideally we'd like to develop water-heating solutions across all income groups to have the biggest impact."

"We hope to see solar water heaters factored into the budgets of all new low-income housing developments. This renewable energy could eventually be combined with ceiling insulation and rainwater-harvesting measures to ensure each house has less impact on the environment."     

Nine sites have been identified in KwaZulu-Natal, Gauteng, North West, Free State, Eastern Cape and Western Cape. "Thousands of new houses will have access to hot water using renewable energy on a sustainable basis," says Nelson. "The project will not only reduce carbon emissions, but aims to uplift communities by providing indigent households with a source of hot water."    

 The project also has strong job creation credentials, with more than 800 new jobs created.

Every unit counts
The IDC's focus on the entire value chain in the green economy is demonstrated by Solar Network, a provider of specialised financing for solar water-heaters in the household and private sectors.

"Our mission was to make solar water heaters accessible and affordable," says Solar Network chief executive, Quinton Zunga.

"The Green Energy Efficiency Fund will enable Solar Network to roll out solar water heaters to at least 400 households by removing the challenge faced by many clients in financing the high upfront costs."

The company is well positioned to benefit from government's target of installing one million  solar water-heaters by 2015, as well as the general trend toward household energy efficiency.

The funding from IDC eases the burden on Solar Network, which provides the solar water-heaters on a lease-to-own basis. It also helps to drive the IDC's agenda of greening the economy, and the compound reduction in energy demand – these units replace more than 40% of electric heated water – is very attractive.

It is expected that each unit will provide average annual energy savings of 2 700KWh, with a payback period of eight years. Each unit is also expected to result in 2,8 fewer tonnes of CO2 emissions.

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