Gauteng Business News

Send  Share  RSS  Twitter  05 Aug 2009

Business: Teljoy Solar Introduces Its Ground-Breaking Green Credit


Recent Gauteng Business News

Thanks to the recent 31 percent price hike many electricity users are feeling the pinch resulting in Teljoy Solar seeing overwhelming interest by consumers wanting to instal solar hot water heaters. However, in this present economic climate, many householders have difficulties raising finance to install systems.

This prompted Teljoy Solar to offer its own Green Credit. Starting from R249 a month over a period of 48 months, and a R2500 down payment, consumers can fit solar to their geysers. This monthly payment would be significantly offset by lower electricity bills as heating water accounts for between 30% to 50% of household electricity usage. After the 48 months, there would be virtually no ongoing cost for the system but the saving on hot water would continue and the system should last for between 10 and 15 years. Obviously further electricity rate hikes will mean greater savings.

Where Eskom rebates are applicable, they will accrue for the benefit of the customers and Teljoy will assist the customers to apply for those rebates.

The man behind Teljoy Solar is Theo Rutstein. In the early 1970s, Rutstein mobilised public opinion to compel the reluctant Government of the day to introduce a TV broadcasting service. In 1993 he was a prime mover in the introduction of cellular services in South Africa. Now, 16 years later, he is on another mission: to get South Africans to use our brightest asset - the sun – to power their homes and heat their water.

“You won’t find anyone who thinks it’s a bad idea and the one thing this country has in abundance is sunshine. The problem is most people don’t have the initial capital investment just lying around to pay cash for the system.”

Rutstein, frustrated by a lack of easy-to-access credit, decided to offer his own Green Credit. He also believes that the Government should offer subsidies, tax rebates or tax allowances for people and businesses who convert geysers to solar systems.

The recent increase of 31% on average, granted to Eskom will help the parastatal to continue operating but will not solve the looming crisis. The economic downturn has reduced the demand for electricity and therefore staved off load shedding. However, the generator capacity has not increased and building power stations takes many years. Therefore once the economy recovers, the grid will again be stressed and power outages or load shedding is inevitable.

“What is required is the introduction of strong incentives to encourage the saving of electricity,” says Rutstein, “and solar is the obvious choice in this country.”

Water heating accounts for between 30 - 50% of the average householder’s use of electricity. If solar water heating devices were installed in every home, it would obviate the need to build so many power stations. Moreover solar water heating is environmentally friendly and will have a substantial impact on the reduction of carbon emissions.

Rutstein finds it incredulous that it has not been made compulsory for all new building projects to install solar systems.

“I believe that for the cost of one power station, it would be possible to provide solar water heating systems to about five million homes. Once the water heating system is installed, there is no additional cost for heating water, and no need to generate electricity for that purpose. This will have a very meaningful impact on the economy and on the planet.

“Legislation is required to compel significant industries to install power saving devices. Moreover, the developers of all new residential housing projects, especially RDP and affordable housing, should also be compelled to install solar geysers. In the absence of such legislation, or severe penalties being levied for excessive use of electricity, few people will be energised to reduce consumption.”

Rutstein acknowledges that Eskom has promoted the idea of solar systems. However, despite considerable spend on promoting the concept, very few consumers have taken advantage of the subsidies offered by Eskom. The reason is simple. The requirements to obtain the subsidy are onerous and complicated. Moreover meeting the Eskom criteria, adds significantly to the cost of the installation thereby negating the benefit of the subsidy. The subsidies should not be administered by Eskom. Logic dictates that Eskom’s function is to generate electricity and whilst it may use solar and other alternatives for generating electricity into the grid, its function is not to save electricity. Once Eskom has sufficient generating capacity, it would not be in its interests to promote savings which will impact on its revenue stream. Eskom’s resources should be fully deployed in its business of generating elec tricity, not the administrative task of managing subsidies.

An independent body should grant the subsidy on a basis of simplicity. The requirements to qualify for the subsidy should include the SABS mark of approval, installation by an accredited installer and an enforceable warranty by a credible organisation.

Rutstein is no stranger to controversy and taking on governmental organisations.

He founded Teljoy and introduced television rental to South Africa in 1969, six years before television went on air. Teljoy’s advertising campaign triggered a massive public response with thousands of South Africans signing non-binding TV rental contracts which guaranteed that they would have sets installed for the inaugural broadcast. This campaign pressurised the government of the day to introduce TV to the country.

Fast forward 20-odd years and Rutstein – once again looking for revolutionary new opportunities – got into the mobile phone business and Teljoy became the first company to supply cell phones in South Africa and established the largest distribution network for Vodacom.

In conjunction with Vodacom, Rutstein came up with a concept that was totally novel – getting the phone for free in conjunction with a contract. It was an idea that revolutionised the cellphone industry around the world.

So is the move into solar just about the opportunity to make money?

Says Rutstein: “I believe that solar represents an equivalent opportunity today as applied to television in the 1970s and cellular in the 1990s. I have no doubt that it is the next big thing but it is difficult to foresee how long it will take for the opportunity to be realised. In the meantime it requires heavy investment. For me solar started out as a business opportunity that really made sense but the more I’ve looked at it the more I realise that this is not only about business. It’s about making an essential contribution to the South African economy and also reducing carbon emissions in the interests of our children and grandchildren.”

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