27 July 2012
Standard Bank Group stimulates local solar water heater industry with carbon credits
Standard Bank Group has registered with the Clean Development Mechanism (CDM) Executive
Board of the United Nations Framework Convention on Climate Change (UNFCCC), under
the Kyoto Protocol, a programme of activities (PoA) that will facilitate the supply,
installation, and financing of solar water heaters to provide hot water services
for low-income households in South Africa.
Solar water heater (SWH) installers can register projects of a thousand heaters
or more with the Standard Bank Group Low Pressure Solar Water Heater Programme for
South Africa, earning Euros from the carbon credits generated by their projects
and sold on their behalf by Standard Bank Group's carbon trading division.
"Most solar water heater installers are small to medium enterprises and the cost
of registering their own CDM programme would be onerous," says Geoff Sinclair, head
of Standard Bank Group's carbon trading division. "Also, the process of selling
the credits requires specialist knowledge.
"Our programme relieves them of those problems while giving them access to additional
revenue streams at the nominal cost we charge to do the administration of registering
them for our programme.
"As the installers can also take advantage of Eskom rebates, the overall effect
of the programme is that low income householders will get hot water free of charge
or at minimal cost."
The Standard Bank Group Low Pressure Solar Water Heater Programme confers significant
other social, economic, and environmental benefits.
It gives a sizeable boost to the government's target, announced in 2009, of rolling
out one million solar water heaters by 2014. Because it provides training for technicians
to install and maintain solar systems, it will lead to skills development and to
employment opportunities in the solar sector. The provision of hot water to residents
will help improve municipal and local government service delivery.
Environmentally, the programme will help create a sustainable, low carbon economy,
by making use of renewable energy and enabling a reduction in fossil-fuelled electricity
usage, thereby lowering the country's greenhouse gas emissions.
At an economic level, because water heating accounts for a third to a half of energy
consumption in the average household and, therefore, a major demand on the nation's
electricity grid, Standard Bank Group's programme will help to reduce pressure on
demand and instances of load shedding.
Standard Bank Group will act as the co-ordinator of the programme, ensuring that
all participating installers, suppliers, sub-contractors, and SWH systems meet the
specified standards of the programme and that the quality of the systems and installations
is not compromised.
The SWH initiative is Standard Bank Group's second such programme in South Africa.
Standard Bank Group has been collaborating with the Nelson Mandela Metropolitan
Municipality, International Carbon, the Industrial Development Corporation, and
the Solar Academy of Sub-Saharan Africa on the only other CDM-registered low pressure
solar water heating programme in the country. The bank has financed some of the
set-up costs of the project and is selling the carbon credits generated by the installation
of a total 110 000 solar water heaters installed in low cost housing in Nelson Mandela
"We're now celebrating the registration of our own SWH programme by giving installers
a two-month window in which we will waive the nominal upfront costs of their registering
their projects with us," Mr Sinclair says. "We already have three installers on
the programme and we expect that once people become aware of how easy our programme
makes it for them to participate in the fast-growing renewable energy sector, many
more will jump at the chance to register."
Most areas in South Africa average more than 2 500 hours of sunshine per year, making
the heating of water by solar means an obvious choice. Standard Bank Group itself
makes use of alternative energy sources for lighting and water heating at its own
As part of its commitment to encouraging sustainable energy use in South Africa,
it is registering with the UNFCCC the Corporate Energy Efficient Lighting Open Access
Carbon Project, which enables corporates to reduce their electricity bills by up
to 25% and earn carbon credit revenues by retrofitting their properties with technologically
advanced and energy-efficient light bulbs.