Solar Water Heaters Subsidies: Suppliers Idling

The second phase of subsidies on solar water heaters run slow compared to the first phase. The figures released by the Environment Minister in response to a question from the member Reza Uteem during the parliamentary session of Tuesday, June 12, indicate a slowdown in the disbursement.

The tightening of regulations in order to avoid cases of scam identified in the first phase could be causing this slowdown.However, although the procedures used to approve grant applications appear to work successfully, the figures provided by the Minister Deva Virahsawmy clearly demonstrate that it is the suppliers who fail to keep pace.

Indeed, distributors of solar water heaters registered with the Business Development Bank (DBM) has installed 1,792 units since the beginning of the year when 12,849 applications were approved by the financial institution. Representing a total payout of Rs 17.9 million.

This program was placed under the Ministry of Energy, in 2008. Since 2011, it is overseen by the Ministry of Environment.Following numerous allegations of misconduct that marred the previous plan, the Ministry of Environment undertook to thoroughly review the procedures for disbursement of grants.

The minister, Virasawmy Deva, had almost immediately assured that the operation of the plan would be revised to avoid the inconvenience and potential scams targeting consumers. This exercise took a whole year, and it was not until January this year that the second phase was finally launched.

"Based on past experience, we have taken steps to improve the project and make it more viable," said Minister Deva had Virasawmy during a press conference at the end of last year.

Thus, the DBM offers a contract in which 41 points are designed to ensure maximum safety to the public. He was, among other things, imposed a minimum of 7 years after sale service free. Distributors must file a security bond of half a million rupees and valid for a period equal to the product warranty. The conditions imposed seem to have slowed the disbursement of all that there is no payout before the end of the installation of solar water heaters to customer satisfaction.

During the first phase launched in July 2008, the disbursement was made faster. The total amount paid after two years of operation had reached Rs 240 million.

In only nine months of operation (July 2008-April 2009), some 12,711 families had already received a payout while more than 22,000 applications were pending. During this same period, the number of suppliers in this sector had exploded from 6 to 45.

This information was provided to the National Assembly on 1 December 2009 by Deputy Prime Minister, Rashid Beebeejaun.The latter was then responsible for the file in response to a Private Notice Question of Paul Berenger. The opposition leader had expressed his suspicions of fraud and even complicity in the DBM to manage the disbursement.

Rashid Beebeejaun promised a survey of 12,711 affected families to determine if there had been a misdeal. However, the results of that investigation were never made public.