PURPOSE: This study investigated whether the Clean Development
Mechanism (CDM) could assist with the funding of low-pressure
solar water heaters in low-cost housing in South Africa. It aimed
to identify the minimum requirements for the CDM to succesfully
act as a funding mechanism.
METHODOLOGY: In this mixed-method study, qualitative methods,
including a literature review, interview and case study, were used
to inform the quantitative part of the study by identifying the key
variables that had to be considered in developing a financial model
that allowed the identification of the parameters that would make
the CDM a viable funding mechanism.
FINDINGS: It was found that the Clean Development Mechanism
by itself cannot fund the installation of 110l LP-SWH in low-cost
housing in South Africa. For a CDM programme to be financially
viable the CER prices should be at levels above R80 each and
the price per LP-SWH should be less than R3 388.
LIMITATIONS: In determining the feasibility parameters the study
only considered two variables: the CER price and the capital costs
of a LP-SWH unit.
VALUE OF THE PAPER: The paper offers policy makers and financial
institutions an indication of the feasibility of the CDM as a financing
mechanism for LP-SWH in low-income housing.