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Republic of Yemen MINISTRY OF ELECTRICITY & ENERGY PUBLIC ELECTRICITY CORPORATION (P.E.C). The Technical Training & Manufacturing Center. Sana’a – Dhban- Tel: +967-1-328286 Fax: +967-1-326185 www.tcmpec.com.ye - Email: [email protected]. Submitted by : Engineer Abdul Ghani M. Motaher. - PowerPoint PPT Presentation
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Sana’a – Dhban- Tel: +967-1-328286 Fax: +967-1-326185 www.tcmpec.com.ye - Email: [email protected]
Submitted by:
Engineer Abdul Ghani M. Motaher
Framework to Promote Domestic Solar Water Heaters
1. Domestic Solar Water Heaters
Significant demand exists for domestic water heating in the highlands of Yemen .Solar water heating offers a good opportunity for the highlands since during this period the solar radiation availability is high (more than 8 hours per day).
The proposed renewable energy policy framework targets a maximum potential savings of around 686 GWh from domestic solar water heaters in 2025 (Chapter 2 of this study). Urban household’s solar water heating demand was taken from the empirical study. The urban household’s electricity consumption, water heating load, and estimated collected energy by solar water heating systems.
Table 5‑1: Urban household electricity demand, water heating load and energy collected by SWH systems
HH Categ
ory
Average consump
tionWater heating
load per monthEnergy collected by SWH
systems (kWh/month)
kWh/month %total load kWh
2 m2 (50 liters
storage)
4 m2 (100 liters
storage)
6 m2 (200
liters storage)
1 107 0 0
2 m2 50 liters
storage
2 266 25-35 67 – 93 79 - 99
3 466 40-50 186 – 233 157 - 198
4 1149 50-60 574 – 689236 –
297
In order for the government to achieve the proposed targets, it needs to address the main barriers to solar water heaters in Yemen. Based on consultant’s interviews with technology suppliers and stake holders, key barriers are the following:Lack of government policy and institutional support to kick-off the transformation of solar water heater market,Lack of awareness (consumers, policy makers, general stakeholders) on the benefits of the technology,High initial capital costs of solar water heaters, and Lack of financing mechanisms supporting the development of the market.The following sections propose strategic actions for the government to kick-off market development of solar water heaters in the country.
1.2 Financial AnalysisBased on the estimated electricity savings from the use of solar water heaters, the study analyzed the financial attractiveness of the technology in Yemen. The solar water heater will bring significant decrease of monthly electricity consumption and each household will move one notch below PEC’s tariff classification table. The overall financial benefit of the use of SWH is shown in Table 5‑2.
Similarly, the study carried out financial simulation and the financial analysis indicators are shown in Table 5‑3.
Table 5‑2: Domestic Solar Water Financial Benefits
HH Category
Consumption (kWh/mon
th) Savings (kWh/mont
h)
Demand rang
e (kW
h)
Tariff (c/kWh
)
HH Financial Benefits($ per month)
beforeafter
Savings effec
t
Price effect
Total
1 - - - Up to 200
2.1 - - -
2 266 186 80 201-350 3.6 2.9 2.8 5.7
3 466 288 177 351-700 5.2 9.2 4.6 13.8
4 1149 628 521 >700 8.72 45.5 22.1 67.6
Table 5‑3: Solar Water Heater Financial Indicators
Collector Size
Capital Cost
($)
Annual Savings
($)
Payback Period (years)
[1]
NPV($) [2]
2 m2 266 68 3.9 337
4 m2 594 166 3.6 873
6 m2 756 811 0.9 6214
1.3 Market Transformation Framework
The financial analysis reveals that solar water heaters are cost-effective and that it is not necessary to provide financial incentives to urban households in order to promote the use of solar water heaters. Key market transformation activities could include the following:
1.Development of market transformation plan2.Launching of information and education campaign3.Establishment of a revolving fund under the
Renewable Energy Fund in the short term and partnership with microfinance institutions in the long term.
Under the market transformation plan, MEE needs to :
identify priority areas – this could target capital cities and large towns in the Highlandsidentify existing and potential SWH dealers in these cities and large towns and to accredit themspecify acceptable technologies, giving priority to locally manufacture technologiesprepare criteria for programme participants, specifying certain conditions each household must satisfyprepare a 5-year financing plan
This is shown in Figure 5‑1. The development of the market and identification of programme participants will be left to the accredited dealers.
To stimulate household investments in solar water heaters, in the short-term MEE could initiate a financing mechanism in a form of a revolving fund to be established as one of the accounts under the REN Fund.
The fund would provide low interest loan for the purchase of the solar water heaters. The loan payment could be integrated in the electricity bill.
In order not to create an increase in electricity payments, monthly loan payments should be set equal to electricity savings. Since the estimated payback period for smaller units is around 3 years, the revolving fund could provide a 3 year loan term to this consumers group. For larger households, financing terms could be shorter - maximum of one year.
MEESWH Market Study and Transformation Plan- List of priority areas/technologies- programme participation criteria- 5 year financing plan
City 1 Governorate 1
City n Governorate n
City 2 Governorate 2
SWH Dealers Governorate 1
SWH Dealers Governorate 2
SWH Dealers Governorate 3
market development
market development
market development
Prequalification and Accreditation of dealers and SWH technology
Figure 5‑1: Market Facilitation Strategy
Figure 5‑2: Short-Term SWH Financing Mechanism
SWH Dealers
Domestic Consumers
MoEREN Fund
Advisory Committe
PEC billing
• donors• govt budget• electric rate surcharge
REN SWH revolving Fund
accreditation SWH
monthly payment, equivalent to savings, n years
Financing Proposal transfer
financing
provide information
As shown in Figure 5‑2, accredited dealers will be responsible for the development of the market and will initially screen programme participants based on screening criteria from MEE.
In the long term, once the market for solar water heaters as well as micro-financing will kick-off in Yemen, MEE could transfer the financing functions to banks and micro finance institutions. This is shown in Figure 5‑3.
Thank you