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Part 2 of my Solar Series – READ THE FIRST ARTICLE HERE
Solar has the ability to effect the economy in a significant way, a large scale uptake of these systems can dramatically reduce the living expenses of a homeowner freeing up much needed Cash to be used elsewhere.
A Solar Water system is an asset to a homeowner as it reduces expenses and as such one recieves a return on the investment of that asset. Our system’s ROI is approximately: 15% in Year 1, 22% in Year 2 and 31% in Year 3.
In an effort to quantify the positive economic effects I will base the calculations on my own businesses systems and objectives: key figures to pay attention to is the amount of Eskom Grid Electricity our solar system displaces which is approx 10 Kilo Watt Hours daily and we also have a 24 Month target of 1000 Solar Systems nationally.
Savings Figures:
Daily Electricity Kilo Watt Hours: 10,000 kWh
Daily Financial Savings @ 2009 Prices: R5,700
Annual Financial Savings @ 2009: R2,080,500
The above figures excludes VAT and Service fees which are levied on electricity sales and constitute approximately 25% of every R1 spent on electricity, therefore since you are also no longer paying this you can add a furtherR520,125 to this figure resulting in R2,600,625 direct savings to Homeowners in South Africa.
Remember this is only the figures for Year 1 at 2009 Prices, with electricity expected to increase dramatically in April 2010 this figure jumps to R3,380,813 based on a conservative 30% increase in electricity prices. Total savings in 2011 – R4,395,056 once again based on a 30% electricity tariff increase. All in all this results in a total direct cost savings of R10,376,493 in the first 3 Years – and our system has a minimum life span of 15 years…
One also needs to bear in mind that this is only the direct savings to the homeowners, this does not take into account what the howeowners will do with this extra money. Some may pay debt, buy a new car, invest it etc. These in-direct effects are known at the economic multiplier and using my FANTASTIC artwork below I will try to explain it in a way that everyone can understand.
Mike receives R600 Wages, and with that he pays Judy, who owns a shop, R450 for his groceries for the month, Judy uses this money to pay her local tattoo artist R300 for work she has done.
So even though we have only started with R600 we have created an economic effect of R1,350 (R600 + R450 +R300) – this is known as the Economic Multiplier and for South African House Holds has been estimated at 0.89 meaning that every Rand we receive, 89 cents is re-invested into the economy and the person that recieves our 89 cents does the same and spends 79 cents and so it goes on. The above example only takes into account 3 Tiers of this whereas in reality there are multiple tiers of re-investment.
So if we are to take the 0.89 Mulitplier Factor into account for our Year 1 figures this results in a TOTAL ECONOMIC IMPACT of R8,808,496 – a fairly substantial figure.
So that is an idea of what economic effects Solar Water Heating can have and whilst the Economic multiplier is no exact science I believe that in an instance like this where a product is known to provide finacial relief to homeowners I am of the opinion that the additional economic effects are an absolute certainty.
At Urban Solar we are dedicated to providing South Africans with effective solutions to reduce their living expenses by utilising sustainable technologies.
We are offering Free Solar Water Evaluations at your homes or start small and install Water and Enery Efficient Shower Heads – VISIT US or MAIL ME - info@urban-solar.co.za
Have a Solar Day!
Hi
First in a series of what Solar Energy means in South Africa for South Africans……..
I thought I’d start off with something that is needed everywhere in the world at the moment – JOBS!
Whilst no doubt a difficult figure to quantify a study Undertaken by AGAMA Energy (South African engineering company) has produced startling results.
| COAL | DIRECT JOBS PER | SOLAR | DIRECT JOBS PER | ||
| MW CAPACITY | GWH GENERATED | MW CAPACITY | GWH GENERATED | ||
| CURRENT | 1.7 | 0.3 | THERMAL | 5.9 | 10.4 |
| FUTURE | 3 | 0.7 | SOLAR PV | 35.4 | 62 |
It is absolutely clear that Solar is leagues ahead of coal in the job creation category. To justify these figures I will let you know a little bit about my business – Urban Solar - I need a team of people for household installations.I need 1 Plumber, 1 Electrician and 2 labour assistants. Each time I expand into a new area I need a new team of 4 people, if I grow I need another team and so on. I estimate that I will be employing approximately 40 people in 24 months, a significant number for a “smallish” business.
This however makes Solar VERY expensive when one considers production costs v.s. coal, and in my opinion is the SINGLE biggest reason Solar has not been embraced as it should. It has never made finacial sense for large energy companies to invest and build Solar Power Stations. It is getting better due to the depletion of our fossil fuels but without MASSIVE government incentives through tax and rebate deals many of the international large scale Solar Plants would never have been built.
What does this mean for us as South Africans ? – well not good news. Our government is already stretched trying to provide health, education and housing to many people. Eskom - the lack of decent leadership completely rules out the possibility of a Future Vision for energy production. They are too busy chasing their own tails…
Where too from here? Given the current direction of energy costs, rates etc I believe that more and more people will start doing it for themselves. The technology to produce sufficient electricity for private use is there and is improving constantly, the conditions in South Africa are in fact pushing private households in this direction.
You will save yourselves money, reduce your footprint on the environment and create jobs – a good combination I think!
Have a Solar Day!
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