# Interest group forums > Energy and Resource Conservation Forum >  My Tip for Trevor

## duncan drennan

Here is my Tip for Trevor which I submitted via the treasury's website.
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Dear Mr. Manuel,

I would like to suggest a possible short term solution to the energy crisis that South Africa is currently facing.

I believe that the demand being placed on our energy supply can be greatly alleviated by encouraging the use of energy savings devices. The are plenty of these, but I believe the one technology that can have the greatest effect is the compact fluorescent lamp (CFL).

An incandescent light bulb (the typical globe with a filament) consumes around 5 times as much power as a CFL to provide the same amount of light.

Currently the incandescent bulbs are MUCH cheaper than CFLs. Interestingly CFLs are about 5x more expensive than normal incandescent bulbs, which means that people focussed purely on direct cost are biased towards replacing bulbs with incandescents instead of CFLs.

The lifetime of a CFL is 6000hrs versus 750hrs for an incandescent - that means 8 incandescent bulbs for every one CFL. Even with RSA's cheap electricity a CFL "pays" for itself in electricity savings in the first year of use.

Census 2001 says that there are 7 815 270 households that use electricity as there main source of lighting. If each of those households were to change 1 single 60W incandescent bulb to an 11 watt CFL (which provides equivalent light) then the energy saving would be of at least 1.5GWh (gigawatt hours) PER DAY. (calculated as, (60-11) * housholds * 4, which makes the assumption that the light is on for 4 hours of the day).

Other than reducing carbon emissions drastically this would also hopefully help to reduce the load on Eskom's power grid. Obviously as business also would have an incentive to apply energy saving techniques there would be even greater savings, and reduction in peak load.

I would like to see energy efficient lighting (like CFLs) subsidised to make it more accessible to everyone, and energy inefficient lighting (like incandescent bulbs) taxed. The tax can go towards the efficient lighting subsidy, and also towards researching and implementing other energy savings products.

With the lifetime of incandescent bulbs being approximately 6 months (750hrs at 4hrs a day), the impact of such a change would take effect relatively quickly (compared to building more infrastructure).

I hope that this idea, whether it is valid or not, has at least stimulated some thoughts on some of the easy ways that we could go about reducing the energy crisis in the interim while infrastructure is provided for new growth.

Thank you for contribution to our country through your financial guidance and wisdom.

Kind regards,
Duncan Drennan (electronic engineer and business owner)

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## Dave A

Incandescent bulb tax (IBT)  :Big Grin:  . Add it to the sin taxes. Pretty good thought there, Mr. Drennan. I am truly impressed.

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## Dave A

It's budget day. We can only wait with bated breath to see of Duncan's IBT proposal makes it.

I quite enjoyed this piece on Trevor's dilemma:




> Finance Minister Trevor Manuel is like a father whose corner shop has made an extra profit, but his children are compulsive shoppers and his wife is incapable of buying household necessities.
> 
> He is also under the scrutiny of community leaders pressuring him to spend more on the homeless.
> 
> The little extra cash comes from the R10-billion revenue collected by the taxman the previous year, and the fact that Manuel has reduced debt by almost half in eight years.
> 
> But the the unions and civil society movements claim that because Manuel comes from a poor area, he must spend this on poverty and creating jobs.
> 
> As he opens his Budget speech on Wednesday in parliament, Manuel will face the dilemma of whether to give his children, the South African consumers, spending money through tax cuts or allow his wife - government departments and provinces - to buy groceries by delivering services.
> full article at IOL here

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## Dave A

I see the news is full of Budget related stories. And now we have the post- Budget breakfast live on TV. 

This is certainly turning into an annual event. We're a short step away from an annual convention, complete with trade show.

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## Debbiedle

Trevor has really brought finance to the man in the street!  I think he is a brilliant finance minister and has certainly had a huge impact on the successes we have shown over the last few years!

May there be many more ministers like him!! Thumbs up to Trevor!

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## Dave A

I agree with Debbie. Trevor probably has been the Minister of the Year for quite a while. Watching him this morning though, I couldn't help wondering what he was thinking about the glitsy gala breakfast event. Maybe it was still a bit early in the morning.

I've been scouting around for the best place on the web so far to get an idea of what was in the Budget and what it means for us.

Fin24 have set up a Budget area here which seems to be really good. It also comes with a handy tax calculator to see how much of Trevor's tax relief you're going to get.

It looks like I get a bit over R4k in personal relief. Woot. 
Now in true South African fashion, I need to think how I'm going to spend my windfall. Maybe a car...  :Whistling:

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## duncan drennan

I see this has finally made it to front page news  :Wink: 




> South Africa finds itself out of step with major countries -- including China -- internationally that are banning the energy-sucking light bulb in a bid to promote energy efficiency.
> 
> Although the energy-inefficient incandescent light bulb adds at least 10% to our annual energy bills, about R2,8-billion a year, South Africa charges a 15% import tariff on energy-efficient CFL (compact flourescent lamp) light bulbs, even though we do not manufacture incandescent light bulbs locally.
> 
> Banning the bulb could reduce South AfricaÃ¢â¬â¢s energy requirements by 800MW at a time when the country is running on low reserves of power, facing sharp cost increases and likely to face power shortages until at least 2010. The capital cost of producing 800MW of energy is about R5,6-billion, says EskomÃ¢â¬â¢s Andrew Etzinger.
> _________
> 
> But the department of minerals and energy says that there are no plans at policy or legislative level to ban old bulbs and encourage the conversion to CFLs.
> 
> Read the full story on M&G Online


There is also an interesting part about Phillips plans to build a CFL plant in the SADC region, and I especially liked this quote,




> Ã¢â¬ÅGovernment should introduce a surcharge on incandescent lamps and remove duties from compact fluorescent lamps to bring prices closer together,Ã¢â¬Â Boyle says.


 :Big Grin:

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## Dave A

You've got to be feeling quite good, Duncan.

Nothing like being ahead of the times.

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## Chatmaster

With the current power cuts (load shedding) going on I noticed that my neighbour's outside lights stayed on. He is using solar powered lights on the outside and it is working stunningly well. I think that can in itself be a terrific idea for all municipal street lights and something else that Trevor can look at...

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## duncan drennan

Cape Town recently installed the country's first set of solar powered street lights, so at least if the power is off, those will be on. My experience of Joburg is that there are far more traffic light issues - I wonder when they will be seeing some solar traffic lights?

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## Dave A

We've been struggling in Durban with traffic lights and the load shedding. Too many folks round here don't understand the concept of four way stops. Every intersection you cross with the lights out is risky business.

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## Eugene

I heard over the news during the week that the pilot project on the solar powered traffic lights in Grassy Park, Cape Town was such a success that they intend rolling it out to otehr parts of South Africa very much sooner than they have anticipated. Great Cape Townians!

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## duncan drennan

What I found fascinating was the cost! R150k for a set of 4 solar powered traffic lights (expected to come down to R110k), and R80k for a normal set of traffic lights. That probably includes all the labour, installation, etc. but R80k for 4 traffic lights is pretty pricey. Gives me a different perspective when I see one that has been knocked over....

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## duncan drennan

Taking this back to tax, I find this programme in Berkley, California really fascinating. Essentially you take out a loan with the local municipality to install solar equipment on your property. You then repay this as part of your municipal rates. It is also tax deductible on your income tax return.

The great thing here is that you can invest in solar technology without the large upfront cost, and the "loan" passes to the new owner when you choose to sell. Your home gains value, but the loan is passed on.




> A property owner would choose a solar installer from a city-approved list. It appears to be a win-win situation solution to the high cost of going solar. The homeowner immediately begins saving money on electricity bills without incurring the $15,000 to $30,000 upfront cost of installing a solar system. They also usually get a boost in their property value from the solar array and the property tax that pays for the system is deductible on their federal income tax return. When the house is sold the solar array and the tax assessment remain with the property, passing to the new owner and thus further diluting the cost of the system.
> 
> Read the full article here

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## Dave A

Those links aren't working for me  :Huh:  Not my night for technology.

But that is quite a price tag! Is that for a system that would deal with hot water *and* electricity?

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## duncan drennan

I'm not exactly sure what those particular systems entail. I _think_ they are large photovoltaic systems to generate electricity (which can also be sold back to the grid). Some are also solar water heaters.

The thing that is interesting to me though is the model, rather than the specifics of their installations. It lowers the barrier to entry to some of these products.

For example, to get a decent solar water heating system in SA costs around R20k, which is a fair chunk of upfront investment that takes quite a while to pay for itself. If you frame that in the context of our energy crisis, it may be a valid way of making these sort of systems accessible on a larger scale.

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## Dave A

Got the links to work now. I loved this little bit.



> “This is going to create green collar jobs,” said Bates.


Really appeals to my sense of humour.

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## Dave A

Time is running out for anyone wanting to send a tip to Trevor this time round - Budget speech day is 20th February.



> "Since the 2007 Budget Speech the Ministry has received over 600 tips covering tax, macro-economics, social, and light hearted issues."


Good on you, Duncan  :Thumbup:

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## duncan drennan

What do you think about introducing a tax incentive for purchasing an energy efficient home? This is how it could work...

A registered evaluator (possibly the people who issue your COC?) could use some sort of standard for evaluating the energy efficiency of a home (e.g. solar geyser, insulation, window insulation) - this could possibly even include water usage (e.g. toilet cistern size, composting toilets, low-flow shower heads).

Based on this evaluation, a tax rebate could be given on transfer fees. This would motivate people to improve the energy efficiency of their homes, even if it is only just before the sale, as it effectively makes it cheaper for the buyer.

Further, there could be tax incentives for developers to build using energy efficient methods (choice of material, lighting, plumbing) which would result in better homes being built.

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## Debbiedle

I think your idea rocks!  The fact is that many developers are simply placing the cheapest short term solution in the budget without looking at the long term implications, obviously because of the bottom line.  Make it worth their while to do things differently!

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## Dave A

Duncan has lots of great ideas. I'm just a little concerned about the sophistication involved. More and more it seems simpler is better.

Still - worth sending as a new tip for Trevor.

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## duncan drennan

> I'm just a little concerned about the sophistication involved.


Good point, so how do we make it simpler?




> ]Duncan has lots of great ideas


Thanks  :Blushing:

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## Dave A

> Good point, so how do we make it simpler?


Hmm. We want something easily measurable and less "subjective." How about average daily electricity consumption? 

I still see challenges with that - for example winter and summer have different consumption drivers. Any other ideas?

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## duncan drennan

What do you think is difficult to measure and is "subjective" about the original idea?

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## Dave A

If we look at the original idea:



> A registered evaluator could use some sort of standard for evaluating the energy efficiency of a home (e.g. solar geyser, insulation, window insulation) - this could possibly even include water usage (e.g. toilet cistern size, composting toilets, low-flow shower heads).


It was the insulation aspect that worried me most. Ultimately, I'd be looking for something that wasn't easy to fudge. We have enough officials who have lucrative sidelines for favourable interpretations of rules already. 

If there is something really simple - a critical control point that gives an indication of all the other stuff anyway - rather go for that. If it can't be done, we need to live with the complexity. But always check for that critical control point - that's the first prize.

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## duncan drennan

> If there is something really simple - a critical control point that gives an indication of all the other stuff anyway - rather go for that. If it can't be done, we need to live with the complexity. But always check for that critical control point - that's the first prize.


Okay, good point. The tricky thing with energy consumption is that it will vary with users. The idea would be to reward (rebate) for a particular type of capital investment in a property.

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## Dave A

> Okay, good point. The tricky thing with energy consumption is that it will vary with users.


True - but the *big* energy gobblers deal with heating and cooling. Insulation and design are significant factors as to how efficiently the energy is managed and conserved.

We don't need to cover all the points, just the big ones that really count.

Murdock also mentioned power ratios...

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## Dave A

It's *tips for Trevor* time again.



> The finance ministry has again invited members of the public to send their suggestions on what they would like to see included in the country's Budget. 
> 
> The annual Tips for Trevor campaign is run throughout the year and provides a platform for the public to engage with Finance Minister Trevor Manuel on issues related to the economy that affect their lives.
> 
> Tips received since the last Budget speech ranged from ideas on job creation and the child support grant to the introduction of an annual licence fee for cyclists, and many more, the ministry said on Wednesday.
> 
> The campaign was launched in 2001 and the ministry has received increasing numbers of tips each year, it added.
> 
> Since the 2008 Budget speech, over 500 tips covering tax, macro-economic policy, social and general issues had been received.
> ...


Hmm. It's going to interesting to see Trevor's growth forecast for the coming year.

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## duncan drennan

It is two years down the line, but the "IBT" (incandescent bulb tax) has been introduced - R3 at the manufacturing level.

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## Debbiedle

Heard that Duncan!  Bet you are pleased!!!! :Yes:

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## Dave A

It takes time for these things to filter through, but you can definitely take a bow.

Well done, Duncan!  :Clap:

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## duncan drennan

> It takes time for these things to filter through, but you can definitely take a bow.


Mr. Saul Margolis was credited for this tip - I think my note from two years ago has long since expired. The important thing is that it has happened  :Smile:

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## Dave A

They give credit for the idea? If there was a royalty it would be worth looking at a little closer. But as you say, the main thing is it happened.

Anyway - in my eyes there is a fair chance you planted the seed, Duncan. You're still a hero to me  :Thumbup:

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## Superscenic

Ah now I see. So Trevor did see the light bulb.

http://www.busrep.co.za/index.php?fArticleId=4837320

That R3 incandescent levy might have been inspired by your note who knows?

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