Overview of activities

Residential Sector

SUBSIDY PROGRAM
Introduction and background

One of the main deterrents for introducing energy efficient lighting technologies into the residential sector (across all income groups) was the initial capital outlay required to purchase a CFL which was relatively unaffordable (around R75.00, or US$ 9 at a exchange rate of R8.5 per US$) when compared to an equivalent sized incandescent lamp. To overcome this barrier, BONESA proposed to link a subsidy or retail rebate to ‘kick-start’ or stimulate sales of CFLs in this sector of the market. To facilitate this, partnerships were established with all ELI-approved manufacturers of CFLs, to subsidize the initial high capital cost of these technologies.

The main objectives in this program was to create awareness of the technology and to ‘buy-down’ the price to an affordable level of ~R20.00. This in turn was expected to increase sales volumes to such a level, that the price would be able to be sustained at around those price levels.

The program was well supported by a number of marketing activities from both Bonesa and the suppliers. Advertising was extensively utilised to enhance the interest of the program and ELI.

Results and benefits

An incentive to use the ELI logo on their products and qualify for a subsidy under this component of the program was given accredited manufacturers. This encouraged manufacturers to participate in the subsidy program and ultimately led to the sale of 1,658,949 CFLs during this campaign.

Bonesa and the Nelson Mandela Children’s Fund (NMCF) also joined forces to promote the use of energy efficient lighting technologies. Bonesa donated R 1.00 from the sale of each CFL to the NMCF.

RDP HOUSING AND NEW ELECTRIFICATION
Introduction and background

This project was aimed at introducing CFLs in the low-income market in urban areas. It was linked to the government’s housing project – Reconstruction and Development Program (RDP). The RDP program entails providing low cost houses to disadvantaged communities, by municipalities. Since some municipalities were providing RDP householders with very simple and low quality luminaires and incandescent lamps, to reduce energy consumption and safety (many of the luminaires burn out because of the heat produced by the incandescent lamp), it was considered necessary to implement a program to cooperate with municipalities to provide a safer luminaire and a CFL.

The idea was therefore to link up with new electrification projects, recently electrified settlements and other lower income residential consumers. The implementation team proposed to implement a project that would, inter alia, have the following benefits:

• It will have a significant impact on the energy consumption of lower LSMs.
• It will have a relatively quick impact.
• The project will be rolled out at scale, affecting a large number of people in a cost effective manner
• It will test the acceptability and workability of both integrated and split units
• The Service Providers will commit to specifying energy efficient technologies for future electrification projects
• Some, albeit temporary, local employment will be created and skills will be transferred
• The project will create positive publicity for both the Service Providers and Bonesa.

Implementation

The project was rolled out in 8 identified sites from Gauteng, Western Cape and Kwa-Zulu Natal. This was done in partnership with local municipalities.
More than 38,500 CFLs and luminaires were distributed and more than 200 job opportunities were created.

As a result of the implementation, beside the pursuit of the above-mentioned benefits, an enormous general awareness in terms of the advantages of the product (CFL) was raised with the communities and affected municipalities.

ELECTRICITY BASIC SUPPORT SERVICES TARIFF (EBSST)
Introduction

In 1999 President Thabo Mbeki announced that all residential consumers would be entitled to 50kWh of electricity and 6,000 litres of water “free of charge” on a monthly basis. The project was targeted at lower income earning households, with a combined monthly income of less than R800.00 (95 US$ at an exchange rate of R8.5 per US$). The aim of this rebate was to assist in poverty relief, through the provision of free basic services. The programme is commonly referred to as the “poverty tariff”.

A number of pilot programmes were commissioned in different parts of the country, to determine an optimum solution for implementing the EBSST. Two rural villages -Zwelitsha and Dengwane - in the Eastern Cape were allocated to ELI-RSA, to determine the feasibility of opting for an efficient lighting - based solution to the problem. This followed Bonesa’s (ELI-RSA) proposition to the Department of Minerals and Energy an alternative method for implementing the EBSST. The plan was that Eskom and/or the Department of Minerals and Energy (DME) provide households with two compact fluorescent lamps (CFLs) plus 40 kWh of free electricity to residential customers with a combined monthly income of less than R800-00.

Distribution

The assembly and distribution of these technologies could also be linked to the non-payment situation, i.e. one could encourage payment by giving an additional CFL to those customers who bring their arrear accounts up to date. This particular activity could also be conducted using local (unemployed) labor, by training them and developing the skills required to assemble and distribute products of this nature.

Benefits

This alternative solution would immediately enable consumers to experience the benefits of approximately 75% “free/saved electricity” on their lighting load, while necessary system upgrade are underway. This would also contribute to minimizing the increase in peak demand, resulting in a beneficial situation for both the customer and the utility. Finally, the proposed option would alleviate the politically sensitive problem of having to increase tariffs for higher consumption residential customers.

Furthermore, the volumes of fixtures and/or lamps that would have to be purchased could lead to price reduction, thereby increasing product affordability. Additional spin-offs would include a solid (and measurable), commitment to the government’s White Paper on Energy, which clearly supports the concept of energy-efficiency, together with the associated environmental benefits of implementing such programs on a wide scale.

Results

The proposal was approved by the government, followed the allocation of two pilots sites to Bonesa. Upon implementation, job creation opportunities were created for local unemployed community members. The local community was extensively involved in the program from luminaires assembly to distribution and awareness creation. A comprehensive skills training and development aspect for these community members was conducted.

Furthermore, the project has shown that the efficient option will provide a “win-win” solution to all stakeholders in the process, and will create an enabling environment for poverty reduction and sustainable development in South Africa.