Feasibility analysis & operational design for local manufacturing of solar water heating equipment

Abstract

South Africa is currently experiencing a shortfall in electricity generation capacity. To fund the construction of new generation capacity, the price of electricity supplied to municipalities by Eskom will have to increase by between 24.8% and 25.9% per annum for the next three years (Creamer, 2010). This exponential increase in electrical prices will have a detrimental effect on South Africa’s economy. Solar water heaters are seen as one of the most cost effective renewable energy options available in South Africa. In view of the expected high growth in the market for solar heating equipment, an apparent lucrative opportunity exists to increase the domestic capability for the design and manufacturing of solar water heating systems or components. In the technical analysis the different solar water heating systems were investigated as well as low-cost water heating systems. Of the low-cost water heating systems the Household Water Mixer were considered the best with an annual saving of R2149.85. An indirect system with flat plate collectors was considered the best solar water heating system currently available on the market. The payback model revealed that this system has a payback period of 3 years. There is a lucrative opportunity to enter the solar water heating market, but it appears to be as a distributor and installer of these systems rather than the manufacturing of these systems.