Eskom will reduce its subsidy on solar water heaters because the response from 60 000 homeowners has meant that the utility is running out of money to keep paying the subsidy. Eskom planned to have one million solar water heaters installed in South Africa.

Eskom subsidised just 60,000 geysers in one year and at that rate it will take the utility 17 years to reach its target of a million installations.

The subsidy on imported geysers is higher than those on locally manufactured ones. The average subsidy on an imported 300-litre high-pressure geyser is R7 470 down from R9 960. The subsidy on locally made geysers with 80% local content is R8 964.

Eskom introduced the subsidies in 2008 to stimulate the installation of solar geysers and so save energy after sustained blackouts rolled through the country. Eskom had been hoping to install about a million solar water heaters by 2013 but in the first two years, just 2 000 homeowners had installed the solar systems.

The householder had to pay the installation fee of about R15k and then follow a rather complicated procedure to eventually receive payment of the subsidy from Eskom.

In January last year, Eskom changed the procedures by doubling the value of the subsidies and allowing suppliers to sell solar water heaters at discounted prices and then claim a rebate from Eskom to make up for the price difference.

As a result, Eskom has now subsidised 64 389 solar water heaters.

According to Eskom spokesman Hillary Joffe the utility increased the subsidy last year and as a result more than 60 000 water heaters were installed.

At the rate of 60 000 solar water heaters a year it would take Eskom about 17 years to reach its goal of one million water heaters and by then the power crisis facing South Africa is likely to be a distant memory.

With new power stations due to come on stream over the next 10 years, South Africa will be generating more electricity than the country will be able to use based on figures contained in the Integrated Resource Plan 2010, approved by the Cabinet earlier this year.

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