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Energy-efficient HVAC and Lighting Equipment Market in South Africa
Frost & Sullivan, April 2011, Pages: 99
The South African energy efficiency HVAC and lighting market is in its early growth stages and is currently driven by high energy prices and Eskom's demand side management (DSM) initiatives that are aimed at ensuring optimum energy use in South Africa. In 2009 this market generated revenues of approximately $272.0 million and achieved a growth rate of 8.6 percent. Between 2009 - 2016 this market is expected to achieved a compound annual growth rate (CAGR) of approximately 10.1 percent. Major challenges that characterise this market include highly price sensitive end users and a lack of skilled professionals.
Research Overview
This Frost & Sullivan research service titled Energy-efficient HVAC and Lighting Equipment Market in South Africa offers a comprehensive examination of key challenges, drivers and restraints. In this research, Frost & Sullivan's expert analysts thoroughly examine the current trends in energy-efficient HVAC and lighting technologies in the residential, commercial and industrial sectors and how service providers can take advantage of opportunities that are expected to arise within this industry.
Market Overview
Soaring Energy Costs Open Significant Growth Opportunity for Energy-efficient Technologies
Currently, high energy costs are the main drivers of energy-efficient heating, ventilation and air conditioning (HVAC) and lighting technologies in South Africa. The price of electricity has increased significantly since 2007 and this has created pressure on households and industries to save energy and minimise costs. The market is expected to experience high growth due to Eskom’s demand side management (DSM) and high energy costs.
“The high cost of electricity has been a major driver of energy-efficient technologies in South Africa,” notes the analyst of this research. “Between 2007 and 2010, the price of electricity increased by an average of 32.9 per cent.” This intensified pressure on households and businesses to reduce operating expenditure by reducing electricity consumption. Further, Eskom embarked on DSM initiatives in order to ensure the efficient use of energy in South Africa.
Increased Consumer Awareness to Boost Adoption Levels
Some energy-efficient equipment such as light emitting diodes (LEDs) involves high capital costs. Hence, most industries are reluctant to invest in such equipment. Moreover, information on energy-efficient technologies is generally scarce in South Africa and this limits the adoption of such technologies in the country. “Information on energy-efficient technologies is poorly disseminated and is often inaccessible to the general public,” emphasises the analyst. “Consumers will only purchase a lighting technology if the benefits compensate for the original cost of equipment; if they perceive the price to be too high without understanding the potential economic benefits, then this becomes a ‘high-cost’ psychological barrier.”
Despite a highly price sensitive market and the lack of understanding of the potential benefits of energy-efficient technologies, opportunities for growth still exist. Increasing consumer awareness concerning the potential benefits of energy-efficient technologies is a key element for the development of this market.
“Increasing market awareness through rigorous campaigns will help widen knowledge about the various energy-efficient technologies available in this market,” advises the analyst. “Eskom’s DSM is one of numerous initiatives that could be undertaken to enhance consumer awareness.”
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following application sectors in this research:
- Residential
- Commercial
- Industrial
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