Exploring the possibility of the insurance industry as a solar water heater driver in South Africa

Thesis (MPhil)--University of Stellenbosch, 2011. / ENGLISH ABSTRACT: South Africa is facing an energy crisis on two levels; the existing capacity to supply electricity is
unable to support future growth in demand, and the electricity being produced comes mostly from
coal-fired power stations with associated emission problems. The South African government has a
target for renewable energy to service 23% of the country’s energy consumption by 2013. This
could potentially be realised through achievement of another government target, the installation of
one million Solar Water Heaters (SWHs).
On a technical level, Solar Water Heaters (SWHs) represent a completely viable renewable energy
alternative for South Africa. It is an established and proven technology which has the potential to
have a big impact on the country’s electricity capacity problems. SWHs can be used in a variety of
applications from industry to households. Most of the hot water in South African homes is heated
by electric resistance heating in standard electric water heaters and there are no technical
obstacles to replacing most of these with SWHs, thereby delivering a saving of up to 70% of the
water heating energy bill. Water heating currently accounts for 40% of domestic electricity
consumption within a residential sector that uses 20-30% of the national supply. At the macroscale,
the roll out of SWH programmes is completely scalable.
The benefits of SWH installation accrue to the consumer in the form of a financial saving in the
long-term and to society in the form of reduced emissions. Awareness of the benefits is growing
amongst the general public, commercial institutions and in government. Sales are starting to pick
up due to, amongst other reasons, electricity price hikes and government subsidies for SWH
installations offered through the national electricity supply company, Eskom. A national building
regulation enforcing energy-efficient water heating in new buildings has been drafted and is
expected to be in place by mid 2011.
The rate of change from electric to solar water heaters remains disappointingly slow, however.
The SWH industry in South Africa accounts for less than 10% of total hot water solutions sold.
This study sought to establish the opportunities as well as possible barriers for the creation of SWH
programmes within the insurance sector. Close to 50% of all standard electric water heaters
installed in South Africa are procured and installed via the insurance industry due to the failure of
units that have endured beyond the manufacturer’s guarantee period. This presents an
opportunity for interventions that encourage policyholders to change to SWHs. Such interventions,
if successful, would dramatically speed up the roll out of SWHs in South Africa. In addition the study sought to determine the barriers to the uptake of SWHs by policyholders in the case of the
two insurance companies that currently have SWH programmes in operation.
Data was collected through interviews with representatives in the insurance industry and a range of
SWH industry stakeholders and consumers. The literature review focused on SWH policies and
regulations and corporate and marketing theories. The material on transition in socio-technological
systems proved especially useful in understanding the complex dynamics of the study topic.
The conclusion drawn from the research is that the South African insurance industry has the
capacity and opportunity to drive the penetration of SWH technology. The opportunity is, however
not being exploited to anywhere near its potential. The entire system is geared towards providing
a particular ‘business-as-usual’ solution. Analysis conducted in this study confirms that the system
is in a “locked-in” state and extremely resistant to change. If the opportunity is to be acted on, to
supplant the dominant technology for water heating installed by the insurance industry with what is
currently a niche technology (SWHs), an external landscape shock is almost certainly needed.
This shock to the system could be aided by interventions that target a change in the current
system’s logic. The study provides some suggestions in this regard. / AFRIKAANSE OPSOMMING: Suid-Afrika staar ‘n energie krisis in die gesig. Aan die een kant is die bestaande
elektrisiteitsvoorsiening nie genoeg om plek te maak vir die toekomstige vraag na elektrisiteit nie
en aan die ander kant word meeste van Suid-Afrika se elektrisiteit opgewek deur steenkoolaangedrewe
kragstasies met gevolglike probleme as gevolg van vrylating van kweekhuis-gasse.
Die Suid-Afrikaanse regering het ‘n teiken vir hernubare energie om 23% op te maak van die land
se totale energie verbruik teen 2013. Hierdie teiken sou potensieel bereik kon word deur die
bereiking van ‘n ander van die land se teikens, naamlik die instalering van een miljoen
sonverhitters.
Op ‘n tegniese vlak verteenwoordig sonverhitters ‘n lewensvatbare hernubare energie alternatief
vir Suid-Afrika. Dit is ‘n beproefde tegnologie wat die potensiaal het om ‘n groot impak te hê op die
elektrisiteit kapasiteitsprobleme van die land. Sonverhitters kan ‘n verskeidenheid van warm water
behoeftes bevredig, van groot industrieë tot tuisverbruik. Meeste warm water in Suid-Afrikaanse
huise word verhit deur standaard elektriese geisers. Daar bestaan geen tegniese hindernisse om
hierdie geisers deur sonverhitters te vervang en tot 70% van die water verhittings energie rekening te bespaar nie. Water verhitting maak tans 40% van die totale huishoudelike elektrisiteits verbruik
op. Die huishoudelike verbruik is 20-30% van die nasionale verbruik en selfs hoer gedurende piek.
Op die makro skaal is die uitrol van sonverhitters heeltemal skaleerbaar.
Die voordele van die installering van sonverhitters val die verbruiker toe in die vorm van finansiele
besparing oor die lang termyn en vir die samelewing as geheel in die vorm van emissie
besparings. Bewustheid van die voordele is aan die groei by die algemene publiek, kommersiele
instansies en by die regering. Verkope het begin optel as gevolg van onder andere die
elektrisiteits prysverhoging en die staatssubsidies vir sonverhitters aangebied via die nasionale
elektrisiteits toevoer maatskappy, Eskom. A nasionale bouregulasie wat enegie doeltreffende
waterverhitting sal afdwing op nuwe geboue is reeds opgestel en dit word verwag dat hierdie
regulasie in plek sal wees teen middel 2011.
Die koers van verandering van elektriese water verhitters na sonkrag bly egter teleurstellend laag.
Die sonverhittings industrie in Suid-Afrika maak minder as 10% van die totale water verhittings
mark uit. Hierdie studie het beoog om die geleenthede sowel as die moontlike versperrings tot die
skepping van sonverhittings programme in die versekerings bedryf uit te wys. Die versekerings
bedryf koop en installeer ongeveeer 50% van alle standaard elektriese geisers in Suid-Afrika as
gevolg van elektriese geisers wat breek na die vervaardiger se waarborg verval het . As gevolg
hiervan bestaan daar ‘n geleentheid vir intervensies wat polishouers aanmoedig om te verander na
sonverhitters. Sulke intervensies, indien suksesvol, het die potensiaal om die uitrol van
sonverhitters in die land dramaties te versnel. Verder het hierdie studie beoog om die versperrings
tot die opname van sonverhitters uit te wys by twee versekerings maatskappye in Suid-Afrika wat
wel sonverhittings programme het.
Data is versamel deur onderhoude met verteenwoordigers van die versekeringsbedryf en ‘n reeks
sonverhitting industrie belanghebbendes en verbruikers. Die literatuurstudie het gefokus op
sonverhittings beleid en regulasies en korporatiese en bemarkings teorie. ‘n Literatuurstudie in
oorgang in sosio-tegnologiese sisteme was veral nuttig om die komplekse dinamika van die
sisteem te verstaan.
Die gevolgtrekking van hierdie studie is dat die Suid-Afrikaanse versekeringsbedryf wel die
kapasiteit en geleentleid het om die penetrasie van sonverhittings tegnologie te dryf. Hierdie
geleentheid word egter nie gebruik tot sy volle potensiaal nie. Die ganse sisteem is gerat om ‘n
spesifieke tegnologie op ‘n sekere manier te verskaf. Analise in hierdie studie bevestig dat die
sisteem in ‘n geslote staat is en daar is uiterste teenkanting tot verandering. Indien hierdie geleentheid om die dominate tegnologie vir waterverhitting geinstaleer deur die versekerings
bedryf te verplaas met wat op die oomblik nog ‘n niche tegnologie is (sonverhitters), is ‘n eksterne
landskap skok nodig. Hierdie skok tot die sisteem kan aangehelp word deur intervensies wat ‘n
verandering in die huidige sisteem logika teiken. Hierdie studie bied ‘n paar voorstelle in hierdie
verband.

Identiferoai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/6471
Date03 1900
CreatorsKritzinger, Karin
ContributorsSebitosi, A. B., University of Stellenbosch. Faculty of Economic and Management Sciences. School of Public Leadership.
PublisherStellenbosch : University of Stellenbosch
Source SetsSouth African National ETD Portal
Languageen_ZA
Detected LanguageUnknown
TypeThesis
RightsUniversity of Stellenbosch

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