Average economic performance of solar water heaters for low density dwellings across South Africa

In 2007, the South African government embarked on an ambitious program to subsidise installation of 1 million solar water heaters (SWH) by 2014. The program has subsequently stalled in 2015 after falling short of its target and SWHs are now commercially available without subsidies. This paper investigates the economic attractiveness of SWHs for chosen municipalities across South Africa, by establishing a “base case” scenario of an average SWH, a low density housing hot water consumer profile and average historic economic data. The effect of varying a selection of parameters, such electricity price, discount rate, mortgage rate, SWH efficiency and price, fuel price inflation and household size on the base case payback period is studied. The error associated with the use of such an average profile is estimated. The longest and shortest payback period for each of the varied parameters is displayed for the municipalities under study. It is found that the average payback period of 8 years in South Africa exceeds the SWH warranty period by three years.