Standardization and Certification of Solar Water Heaters:A Regional Workshop 17 - 18 November, 2009

1. Sana’a – Dhban- Tel: +967-1-328286 Fax: +967-1-326185
www.tcmpec.com.ye - Email: tcmpec@com.ye

2. :Submitted by
Engineer Abdul Ghani M.
Motaher

3. 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).

4. 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.

5. Table 5‑ 1: Urban household electricity demand, water
heating load and energy collected by SWH systems
Average Water heating Energy collected by SWH
consump load per month )systems (kWh/month
tion
HH
Categ m2 6
ory total%
m2 2
(50 liters
m2 4
(100 liters (200
kWh/month load kWh storage storage liters
) ) stora
ge)
m2 2
50 liters
1 107 0 0
stora
ge
2 266 25-35 93 – 67 99 - 79
3 466 40-50 233 – 186 198 - 157
– 236
4 1149 50-60 689 – 574
297

6. 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.

7. 1.2 Financial Analysis
Based 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.

8. Table 5‑ 2: Domestic Solar Water
Financial Benefits
Consumption
HH Financial Benefits
(kWh/mon
Demand ($ per month)
)th Savings Tariff
HH rang
(kWh/ (c/k
Cate e
mont Wh Savings Price
gory afte (kW Tota
before )h ) effec eff
r )h l
t ect
1 - - - Up to 2.1 - - -
200
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

9. Table 5‑ 3: Solar Water Heater
Financial Indicators
Collector Capital Annual Payback NPV
Size Cost Savings Period ($) [2[
($) ($) (years)
[[1
m2 2 266 68 3.9 337
m2 4 594 166 3.6 873
m2 6 756 811 0.9 6214

10. Market Transformation Framework 1.3
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 plan
2.Launching of information and education campaign
3.Establishment of a revolving fund under the
Renewable Energy Fund in the short term and
partnership with microfinance institutions in the long
term.

11. Under the market transformation plan, MEE
: needs to
identify priority areas – this could target capital
cities and large towns in the Highlands
identify existing and potential SWH dealers in
these cities and large towns and to accredit them
specify acceptable technologies, giving priority to
locally manufacture technologies
prepare criteria for programme participants,
specifying certain conditions each household must
satisfy
prepare a 5-year financing plan

12. 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.

13. 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.

14. Figure 5‑ 1: Market Facilitation Strategy
SWH Market Study and Transformation
Plan
MEE - List of priority areas/technologies
- programme participation criteria
Prequalification - 5 year financing plan
and
Accreditation of
dealers and SWH
technology market
development
SWH Dealers City 1
Governorate 1 Governorate 1
market
development
SWH Dealers City 2
Governorate 2 Governorate 2
market
development
SWH Dealers City n
Governorate 3 Governorate n

15. Figure 5‑ 2: Short-Term SWH Financing
Mechanism
• donors
• govt budget
MoE • electric rate surcharge
Advisory REN
Committe Fund
REN SWH
revolving Fund
Financing
provide transfer
Proposal
information
financing
PEC
billing
SWH Domestic monthly
Dealers Consumers payment,
SWH equivalent
accreditation
to savings,
n years

16. 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.

17. 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.

18. Thank you