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What is the typical payback period for an Elon Solar PV water heater?

Few people are aware of the tax incentives available to businesses in South Africa for solar PV installations.

Residential water heating is the single biggest residential electricity consumer.

Actual performance data from customers’ Elon Solar PV systems.

What SANS 10400-XA is and what Regulation XA2 says about water heating.

An apples with apples cost comparison of different water heating options.

How much CO2 can an Elon Solar PV water heater save?

Answers to the most common questions.

Payback Period

The size of the solar PV array (in other words, the number and power rating of solar PV panels on the roof) will directly impact the performance of the Elon. Additionally, time of year and location will also have an impact on system performance.

As can be seen from the graph below, payback period decreases as number of solar panels increases, and is also different for Johannesburg, Cape Town and Durban.

The reason that payback period improves (decreases) as number of solar panels increases, is because there are some fixed costs (such as engineering design & safety components) and some costs that do not scale linearly with array size (such as labour, wiring, mounting kit costs, etc.).

Note: payback period is also dependent on your normal hot water usage levels. If you use 50 litres hot water/day, the energy required to heat 50 litres/day is how much you can save

Elon Smart Water Chart

Payback Period Decreases as the Size of Solar PV Panel Array Increases

SANS 10400-XA Compliance

What is SANS 10400-XA?

South Africa’s National Building Regulations and Building Standards Act requires compliance with a set of standards called SANS 10400. SANS 10400 has several parts, of which SANS 10400 Part XA deals with energy usage in buildings.

All new buildings constructed in South Africa have to comply with the National Building Regulations (in other words, with all parts of SANS 10400).

In the latest version of SANS 10400-XA, published in 2021, electrical resistance heating is defined as “electric current derived from the national electrical supply grid passed through a conductor to produce heat.”

How can one comply with Regulation XA2?

Various alternative water heating methods can be used to comply with Regulation XA2, including solar PV, solar thermal (the so-called ‘solar geysers’, heat pumps, natural gas, liquid petroleum gas, sustainable sourced timber and invasive vegetation, heat recovery and biogas.

Of particular interest to residential buildings is Regulation XA2, which states that:

“At least 50% (volume fraction) of the annual average hot water heating requirement shall be provided by means other than electrical resistance heating including but not limited to solar heating, heat pumps, heat recovery from other systems or processes and renewable combustible fuel.”

Some Common Water Heating Options to Comply with Regulation XA2:

Solar Photovoltaic (PV)

Converts photons from the sun into direct current (DC) electricity, which is used to power a heating element

Solar Thermal/Solar Geyser

Captures heat from the sun in water or heat exchange fluid.

Heat Pumps

Transfers heat from colder area to hotter area using mechanical energy (like air conditioner or refrigerator).

Green Tax Incentives & Carbon Credits

Green Tax Incentives

Few people are aware of the tax incentives available to businesses in South Africa for solar PV installations.

Section 12B of the Income Tax Act No. 58 of 1962 allows companies to accelerate the depreciation of the full cost of new solar PV installations as follows:

  • For installations < 1 MW, 100% deduction in the first year.
  • For installations > 1 MW, 50% deduction of costs in first year, 30% in second year and 20% in third year.

Solar PV installations on build-to-rent residential buildings are eligible for this tax benefit. This means that property owners can fully depreciate solar PV water heating installations (done for the purpose of compliance with SANS 10400-XA) in the first year. Effectively this is a 28% discount on solar PV water heating installations!

Carbon Credits

Just like for the green tax incentives, most people are unaware that South Africa has signed into law a carbon tax act in 2019, creating a carbon tax and offset regime.

Companies have to pay for polluting, and the tax is being phased in over a number of years, with the first phase ending in December 2022. The carbon tax in South Africa is currently around R127/ton carbon dioxide.

On the international markets, carbon is trading at about EUR80/ton (or about R1380/ton) as of February 2022.

With the Elon Smart Water Solution, build-to-rent property owners can now register their solar PV water heating installations as carbon offset projects and gain additional income

The carbon tax in South Africa is currently around R127/ton carbon dioxide.

Summary of Tax Incentives & Carbon Credits

Carbon Credits

Companies can register their solar PV installations, meter the solar PV energy produced and sell the carbon credits on the SA or international markets.

Summary of Tax Incentives & Carbon Credits

Section 12B

Companies can fully depreciate the cost of solar PV installations in the first year.

The Carbon Footprint of Hot Water in South Africa

Most people don’t realise how much energy is required to heat water, since the geyser works automatically in the background and the water heating bill is not a separate item in the electricity bill. But residential water heating is the single biggest residential electricity consumer at about 40% of total household electricity use.

When you combine this with the fact that South Africa generates 85% of its electricity with coal, you end up with a very large national carbon footprint for water heating.

The Carbon Footprint of South African Geysers in Numbers:

  • About 300 kWh per month per water heater
  • South Africa’s carbon emissions intensity = 879g CO2e/kWh
  • Therefore 1 geyser produces about 3.1 tons CO2e/yr
  • … and the total installed base of about 7 million geysers in South Africa produces more than 20 Mton CO2e per year
  • … which is bigger than Croatia’s total carbon footprint!

Case Studies - Elon Solar PV Performance

Whether your goal is reducing your electricity bill, maximising return on investment or going completely off-grid, the Elon Smart Water Solution’s plug-and-play solar PV capability can transform your electric geyser into a smart, renewable water heater.

Total Lifetime Cost (Levelised Cost of Energy)

To compare different water heating options that have different initial (capital) cost, different lifespans and different operating & maintenance cost, a common approach used is the so-called Levelised Cost of Energy or LCOE. This approach considers all these different factors to produce a single cost per unit of energy (kWh). This then enables a direct “apples with apples” comparison of different technologies and energy sources. As can be seen from the chart below, Elon solar PV is the lowest cost option on a total lifetime cost basis. Electricity from Eskom or municipalities is the most expensive way to heat water.

 

Overall Cost* for Residential Water Heating (R/kWh)

Elon Smart Water Graph

1 House

What is the environmental impact of installing 1 Elon solar PV water heater?

Installation of an Elon solar PV water heater with about 1 kW of solar PV in Cape Town will save about 39 tons of carbon dioxide over the system lifetime.

That’s equivalent to an average car driving 7 times around the earth!

100 Houses

What is the environmental impact of installing Elon solar PV water heaters on 100 houses?

Installing 100 Elon solar PV water heaters, each equipped with approximately 1 kW of solar PV in Johannesburg, will result in a significant environmental impact, saving around 4000 tons of carbon dioxide over the system’s lifetime.

That’s equivalent to an average car driving 69 times to the moon!

FREQUENTLY ASKED QUESTIONS

Answers to the most common questions.

What makes the Elon Smart Water Solution different?

The Elon Smart Water Solution is the only smart geyser solution that integrates directly with standard electric geysers and also the only solution in partnership with the leading South African geyser manufacturer, Kwikot. It is the only solar PV-ready smart geyser solution in the world.

Where can I buy the Elon Smart Water Solution?

The Elon Smart Water Solution is currently available from Kwikot branches nationwide as well as selected retail outlets

Can the Elon Smart Water Solution be retrofitted to my existing electric geyser?

Yes – if you have a Kwikot electric geyser, your electrician can replace your existing thermostat with the Elon smart thermostat to turn your old electric geyser into a smart, plug-and-play PV-ready geyser!

What is the payback period for an Elon system?

Payback period is between 2 – 4 years, depending on how much hot water you use, where you are in the country and the size of your solar PV system. See more information on payback period here.

What is the difference between the Elon 100 and the Elon Smart Water Solution?

The Elon 100 is a “non-internet connected” solar PV water heater that can be connected to any standard electric geyser (new or retrofit) to heat your water with solar photovoltaic (PV) energy. You can read more about the Elon 100 here.

The Elon Smart Water Solution is our next-generation platform that turns Kwikot electric geysers into smart, green water heaters.

How can solar PV water heating be more cost-effective than solar thermal? Isn’t solar thermal efficiency much better than solar PV?

It is true that solar thermal collectors are currently more efficient per square meter (area) than solar PV modules in collecting solar energy. However, overall efficiency must also take into consideration factors such as heat loss in piping (especially in winter) and energy use of solar thermal circulation pumps.

Solar thermal system lifetimes range from about 7 years (for cheap imports) to about 15 years for high quality (and more expensive) systems. (In a comprehensive analysis, Sandia National Laboratories found that about 50% of solar thermal systems fail within a 10-year period.) Solar PV modules are routinely guaranteed at 80% performance after 25 years, and the US National Renewable Energy Laboratory uses a lifetime of 33 years in its solar PV system calculations.

Solar PV module costs have dropped dramatically – by over 80% in the past 5 years – and the trend is continuing. This has changed the paradigm. Whilst solar PV systems will continue to require more roof space than solar thermal in the short term, the key issue is not roof space, but cost. Solar PV systems have become cost-competitive to solar thermal, and the much longer lifetimes and lower maintenance translate into a lower lifetime cost per kWh.

Where can I register for the extended 5-year warranty on my Elon unit?
What is SANS 10400-XA?

It is a set of energy efficiency regulations that are compulsory for new buildings and for additions and extensions to existing buildings. One of the key requirements of SANS 10400-XA is that no more than 50% of the annual volume of domestic hot water must be heated using grid electricity.

The PowerOptimal Elon® makes meeting this requirement easier than ever before, providing a new cost-effective alternative to heat pump and solar thermal systems.

How many solar modules do I need?

The most important factor here is the total size or power of the solar PV array (measured in kilowatt or kWp) rather than the number of modules. We recommend a minimum of 1 kWp.

The size of solar PV array required depends on the number of people in the household as well as your hot water usage levels. Below is a basic guide for the Elon Smart. 

* 6-minute showers at 40 °C with 8 litre/min (low-flow) showerhead

Note: for more information on size of solar PV arrays for the Elon 100, see the PowerOptimal website FAQ page.

Does the Elon require installation of an earth spike like grid-tied inverters do?

The short answer is NO.

In South Africa most houses use a TN earth. This means the utility supplied neutral (earthed at the transformer) is used as an earth for the house. In the DB board the earth bar is connected to the neutral before the earth leakage.

In cases where the supply to the house is a standalone inverter or generator, the municipal supply is required to be disconnected by a change-over switch before the alternate supply is started.

Grid tied inverters require disconnection on loss of grid to avoid back feed. When the municipal supply is disconnected, the installation’s earth is lost and these installations require a separate earth (typically an earth spike) to meet SANS 10142 safety requirements.

The Elon solar PV water heater never disconnects the supply to the house and does not interfere with the existing earthing arrangement. Therefore it does NOT need a separate earth spike.

The building code requires bonding and earthing of all large metal structures in a house. The solar panels and mounting frames are a large metal structure. This bonding does not require a separate earth spike. Bonding can use an existing earth terminal such as those found on the DB board or can bond to existing metal that is in turn bonded.

SANS 10142 allows 3 different protection mechanisms for different parts of a fixed installation (earthing and bonding with overcurrent; electrical separation of circuits with insulation failure detect; and extra low voltage). Elon provides safety on the solar side through ‘electrical separation of circuits with insulation failure detect’ and not earthing and bonding. This is because solar panels are inherently current limited and therefore cannot generate the overcurrent required to trip a circuit breaker to disconnect the installation on fault.

In summary: a TN Earth is always active even during load shedding provided the municipal supply has not been disconnected at the incomer. Since the Elon does not require disconnection of the municipal supply, it can use the supplied TN Earth and does not require an earth spike.

If the house has no municipal supply and/or is not connected to the municipal earth, then it already needs to have its own earth installed (which can then be used by the Elon).

Are Elon solar PV installations grid-tied or off-grid?

Off-grid. The Elon Smart has a double-pole, double-throw, break-before-make changeover relay that switches power supply to the element between solar PV (DC) and grid (AC). That means that it is impossible for DC power to flow into the AC supply or for AC power to flow into the DC supply. Hence, the Elon qualifies as ‘off-grid’ for solar PV installations.

Below is an example line diagram showing how the Elon system is connected into the wiring of the premises:

How do loadshedding & power surges affect my Elon system?

Loadshedding

The Elon Smart will continue functioning during loadshedding as long as the sun is shining. If there is loadshedding at night or when there is no sun, then the Elon Smart will be off.

Power surges

The Elon Smart has extensive surge and lightning protection built in.

However, for high lightning strike areas, installation of a surge protection device (SPD) is recommended. 

Does the Elon Smart work with geyser brands other than Kwikot?

No, the Elon Smart is designed to fit into Kwikot geysers. It should NOT be installed in geysers from other manufacturers.

Does the Elon have a MPPT?

No, the Elon Smart does not have a MPPT.

Maximum Power Point Tracking (MPPT) is a technique used with variable power sources like solar PV modules to maximise energy extraction as the power output varies.

Most inverters and charge controllers have MPPT built in.

However, MPPT adds cost, and is not strictly necessary where direct DC energy is utilised.

If the solar PV string and geyser element are matched well, the energy loss for a system with no MPPT vs a system with MPPT is small.

In fact, for Elon units, the loss is less than 10% when the PV string and element are matched well. This is because the Elon Smart starts feeding energy to the geyser at just 20V under load, whilst most MPPT systems require 100 – 150V to become operational.

Hence, in low light and cloudy conditions, the Elon feeds energy to the geyser at times when an inverter or MPPT would not switch on at all. This makes up at least partially for the loss in efficiency due to the lack of a MPPT.

It’s more cost-effective to add a solar PV module than to add a MPPT.

Can I install the Elon Smart in series with a MPPT?

No, Elon units should never be installed in series with a MPPT. This is because the Elon utilises the current-limiting characteristic of solar PV modules for switching. If a MPTT is installed in between the Elon unit and the solar PV modules, it might get damaged or interfere with the switching.

Is the Elon Smart compatible with Xtend PTC elements?

No, at this time the Elon Smart is NOT compatible with Xtend PTC elements.

Do I need to apply for approval from my municipality for an Elon solar PV installation?

Please check with a knowledgeable installer in your local municipality, or check the local municipality website. For most municipalities, approval is not required, only registration of your solar PV installation.

For City of Cape Town, approval is required, but no sign-off by a registered professional electrical engineer is required (unlike for other types of solar PV installations).


Further information on City of Cape Town approval for installers

The City of Cape Town mandates online authorization for installers of solar PV systems, including solar PV water heaters, through its e-Services platform. For solar PV water heaters, the application includes a specific tick box (section 4), exempting the need for electrical engineer sign-off on the wiring. Installers must confirm adherence to wiring diagram 5.2. Unregistered installations may incur penalties, so it is important to comply.

So what does this mean for Elon 100 installers?
1. You need to register your company on the City of Cape Town e-Services platform if you have not done so already;
2. Submit the City of Cape Town’s online SSEG application form for each Elon 100 installation or project, making sure to tick the “Solar PV geyser SSEG” option, and the “Sheet 5.2” single line diagram option.

See the City of Cape Town’s SSEG page for more information.

Where can I get training on installing the Elon Smart?

Please note: All Elon Smart installations that include solar PV have to be commissioned by a registered electrician and a Supplementary CoC (Certificate of Compliance) issued.

When the Elon Smart thermostat is installed on its own (without solar PV), a Supplementary CoC is NOT required.

We strongly recommend the use of a PV-Greencard registered installer to install your Elon solar PV water heater system. Don’t do it yourself! Electricity is dangerous and you can endanger yourself and your family.

Installers can contact PowerOptimal for information on in-person training sessions on doing Elon installations. See also the basic online Elon Smart installation training course here.

Can I connect my inverter AC output to the Elon Smart AC (grid) input? What custom timer settings should I use on the Elon Smart?

Yes, you can connect your inverter AC output to the Elon Smart AC (grid) input.

However, you should remember that, when the element is drawing power from the AC side via the Elon Smart, it will draw the full power rating of the element. For example, if it is a 3 kW element, it will draw 3 kW of power. If it is a 4 kW element, it will draw 4 kW of power.

Thus, you will need at least an 8 kW inverter to avoid frequent inverter tripping. Even for an 8 kW inverter, you cannot switch on many high-powered appliances at the same time as the geyser.

You should also keep in mind that a 3 or 4 kW power draw can drain your batteries quickly. Hence, you only want to use inverter heating in the early to mid-afternoon, when batteries are typically fully charged and the solar PV output is high.

The recommended time zone for custom AC heating timer settings on the Elon Smart is in the 12:30 – 15:00 window. You can experiment with the length of this ‘boost’ window to suit your specific circumstances and solar PV installation (for example, you can set it to run on AC / grid power from 13:30 – 15:00).

An alternative is to manually press the ‘heat with grid now’ button in the Elon Smart app on days when the batteries are full. But this requires manual monitoring, which is not always desirable.

Please note: Do NOT install a timer between the inverter and the Elon Smart. The inverter should be set up to always supply power to the Elon Smart. Use the Elon Smart’s custom timers to control when the geyser is heated from the inverter.