This opinion piece appeared in the Business Day on 15 June , 2020. The original can be viewed here.
Two weeks ago mineral resources & energy minister Gwede Mantashe gave answers to a parliamentary question about the state of the national solar water-heating programme.
His answers attracted little media attention, though they revealed how startling public sector incompetence has resulted in stalled service delivery and hundreds of millions of rand in fruitless and wasteful expenditure.
The DA asked the minister how many solar water heaters had been installed in 2019, how many were in storage, and what the monthly cost of such storage was. The minister revealed that no solar water heaters had been installed in 2019 (incidentally, none were installed in 2017 or 2018 either), and that 86,856 solar water heaters (out of a total of 87,206) were in storage, at a staggering cost to the taxpayer of R8,187,956 a month.
A tender for the supply of these solar water heaters was issued on January 12 2016, with supply agreements to be signed on February 29 2016. If we generously assume the 87,000 solar water heaters were delivered by the end of 2016, this means these heaters have been in storage for at least three years.
The auditor-general found fruitless and wasteful expenditure amounting to R89.14m in 2017/2018 and R110.12m in 2018/2019 relating to the “storage cost for solar water-heater geysers that were manufactured but not installed”. Assuming the auditor-general will produce similar figures for 2019/2020, upwards of R300m has been wasted (excluding any costs related to how well the solar waters heaters have survived their time in storage).
How is such reckless waste of taxpayers’ money possible? It surely comes from indifference from public servants and their political masters. But what the story of solar water heaters in SA also reveals is a lack of proper thinking and planning, and failures in the co-operative governance model.
Evidence before the energy portfolio committee would appear to indicate that Eskom resisted the installation of solar water because of the impact it would have on its revenue
From the start the rollout of solar water heaters in SA has been shambolic. The project was launched by Eskom in 2008 with a conditional grant to install 1-million heaters. Yet to date just 400,000 have been installed and they have been beset with problems.
A review of energy portfolio committee minutes since 2008 reveals a catalogue of issues with those that have been installed. About 10% of installed heaters are said to be unsuitable for the SA climate, and thousands were installed incorrectly due to inadequately skilled installers and a lack of monitoring and oversight from Eskom. Due to these failures, many recipients are said to have resorted to conventional electricity to heat water.
In positively Orwellian language these problems presented, according to then energy minister Tina Joemat-Pettersson in 2016, an “ideal opportunity” as they served “as an incubator for suitably skilled and experienced [solar water-heater] installers”. In incompetence we find our salvation. How many millions have already been spent fixing broken solar water heaters is unknown.
But it’s not just poor installations. The failure of the solar water-heater programme reveals a lack of thinking about the impact such systems will have. Evidence before the energy portfolio committee would appear to indicate that Eskom resisted the installation of solar water because of the impact it would have on its revenue.
Similarly, evidence before the committee often revealed that municipalities have consistently resisted the installation of solar water heaters because of the impact on their respective revenues from electricity sales. In addition, some municipalities were targeted for the programme though many supposed beneficiary homes did not have water supplies. Thus, the municipalities in question were not ready to receive solar water heaters.
It seems incredible that these problems and the subsequent delays were not predicted given that municipalities rely so heavily on revenue from electricity sales.
In Mantashe’s response to the DA’s recent question regarding the delays, he stated: “The prolonged period was attributable to the participating municipalities’ delay in concluding the framework agreements with the department in accordance with the Intergovernmental Framework Act, owing to the project being implemented across the different spheres of government … ensuring that governance structures are in place before the commencement of the programme will ultimately enable the level of accountability required from each sphere and or party”.
Apart from not answering why there have been delays, preferring meaningless jargon instead, the minister implies, as per one of his predecessors, that in incompetence we find our salvation.
The solar water-heating programme was shunted from Eskom to the then department of energy in May 2015. It has since been passed to the Central Energy Fund (CEF). ANC minerals & energy portfolio committee member Mikateko Mahlaule quipped in October 2019 that it seemed “every problem the [department of energy] faced was given to the CEF to attend to”.
According to the CEF’s 2018-19 annual report R200m had been set aside for the “implementation of the solar water-heater project” during the year. Despite this, a representative of the CEF told the minerals & energy portfolio committee in October 2019 that installations would start in January 2020.
Mantashe says solar waters heaters are now being delivered to municipalities and that the department of employment & labour has committed R36m to train installers. As it is unclear when that training is due to start, it’s not clear when the installations will begin.
They had better hurry though — the ANC’s 2014 election manifesto stated that 1.3-million new solar water heaters would be installed by the end of 2019. Oh, wait …