Energy department wastes R20.7-million in bungled solar geyser project

The department of mineral resources and energy installed a fraction of the solar geysers provided under a national programme established more than a decade ago. 

Of the 87 206 solar geysers procured between 2015 and 2018, 61 000 were delivered  and fewer than 3 200 were installed. 

In all, the department incurred R20.7-million in fruitless and wasteful expenditure, the bulk of which was caused by additional storage costs for solar water heater geysers that were manufactured but were not installed, according to the 2021 audit report on the department. The department obtained an unqualified audit opinion. 

A large number of these solar geysers are now damaged, missing parts or have been stolen, Democratic Alliance (DA) representative for mineral resources and energy Kevin Mileham said on Wednesday. 

He said a number of solar geysers had disappeared from the municipal warehouse in his constituency in Makhanda in the Eastern Cape. Instead of being installed, they had merely been “dumped on municipalities”. 

Some 1 000km from Makhanda, in the Matzikama local municipality in the Western Cape, the DA found another 2 000 solar water heaters in a state-owned warehouse last week.

Municipal manager Gerald Seas said Matzikama had received 2 000 solar geysers from the department in March last year. Beneficiaries included the residents of Nuwerus, Bitterfontein, Vanrhynsdorp and Klawer. 

“These geysers are earmarked for beneficiary residents … and like the rest of South Africa, these residents are also suffering from load-shedding. If the ANC government had done their job and made sure the solar panel geysers were installed last year, the people would have had hot water every day,” the DA said.

Seas, who learned about the solar geysers in April this year, asked the department’s Lebogang Mosenthal, who manages the project, for an update on the solar geysers.

He was told: “Please note that so far, the department has not yet appointed a service provider for installation and once a tender will be issued, [the] municipality will be informed. The stored solar water heaters at your municipality required [the] replacement of valves from the supplier, however, the department experienced delays from [the] supplier, due to some legal disputes between the department and the supplier that first need to be resolved.”

The department did not respond to the Mail & Guardian’s request for details about its legal dispute with the supplier.  

During the November 2021 budgetary review and recommendation report of the portfolio committee on mineral resources and energy, the reasons for the delay were stated as “legal disputes with some suppliers that had refused to release the procured units”.

“The main reason for the delays was because of a need to procure additional installation materials that had not been included as part of manufactured solar water heaters. The additional material is required because beneficiary houses are built to different standards, while solar water heaters are designed for current building standard[s],” the report says.

The energy department installed only 3 106 solar geysers in seven of 18 municipalities designated to receive the devices.

These delays led to underspending of about R8.52-million in 2021, the auditor general found, because “the process to procure additional installation kits is taking longer than anticipated”.

The DA’s Mileham asserted that factors hampering installations included the fact that the water quality in some areas was too hard “and in others, it was the integrity of the roofs, because they were meant to go onto [government funded houses], so the roofs were problematic”.

A former employee, who worked at the then ANC-controlled mayoral office in the Matzikama municipality, told the M&G, on condition of anonymity, that the installation of the solar geysers was halted because “there were no skill development initiatives for locals to be trained to work on the project”.

Mileham said the energy department had spoken about “the necessity for skilled installers for years”. He recalled a portfolio committee hearing where the department had been asked how long it took to train installers, to which it responded “two weeks”.   

In June 2020, concerns about the geyser programme were raised in parliament, with Mileham noting, “It has been five years since the department of energy took over the solar geyser programme, however, in the five years, the department has incurred R289-million in fruitless and wasteful expenditure. There is no urgency to complete this programme.”

The geyser programme

In 2009, the energy department set a national target to install a million solar geysers in the residential and commercial sectors. The national solar water heater programme was established in April 2010 and Eskom was appointed as implementing agent until 2014, after which the department took over.

In its draft terms of reference document with the Central Energy Fund for bids from qualified service providers for the installation of solar water heaters in 2021, the department noted the target stated in the National Development Plan to install five million solar geysers in residential areas by 2030, but added: “The set target is subject to available resources.”

In May, parliament again expressed concern about what it called the lack of clarity in the energy department’s annual performance plan regarding the national solar water heater programme and recommended that the department develop a monitoring and consequence management mechanism.

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Eunice Stoltz
Eunice Stoltz is a general news reporter at the Mail & Guardian.

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