Sun shines on solar as costs increase

2013-07-31 08:02
Solar energy is becoming financially viable, an industry player has asserted (Duncan Alfreds, News24)

Solar energy is becoming financially viable, an industry player has asserted (Duncan Alfreds, News24)

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Cape Town - The rising cost of electricity supplied through the national grid has made solar technology an attractive option.

Ceres Fruit Growers is the latest company to demonstrate this with the installation of a rooftop photovoltaic system of 1.015MWp which is expected to lower its cost of consumption in the short term.

"The major reason influencing our decision to install a renewable energy solution of this size was to fix a part of our electricity costs when faced with expected electricity tariff increases in the future," said Francois Malan, managing director of Ceres Fruit Growers.

He said that although Eskom was granted an 8% increase, the real rate for users would be higher because of municipality increases.

"We purchase our electricity from the local municipality which is supplied by Eskom. On 28 February 2013, the National Energy Regulator of South Africa (Nersa) announced that Eskom’s electricity tariffs will increase by 8% per annum. However, the individual tariff increases by Eskom and the municipality suggest an average increase of at least 11% for our business."

Electricity cost

The solar installation is being lauded as the largest in Africa and follows similar installations by Vodacom and Woolworths as companies realise the value of reducing energy costs, despite the initial investment.

The additional benefit of solar power is that systems begin to pay for themselves within a relatively short period of time, especially as the cost of electricity via the grid continues to increase.

"A couple of years ago, you were looking at a return of investment of about 17 years for a simple payback model; it has come down to where you can reach payback anywhere between eight and 12 years, but with this particular project here, and also because we've entered into an agreement with Eskom, our payback is around 5.5 years," Chris de Jongh, manager of Repairs and Maintenance for Facilities South at Vodacom told News24 about the operator's project.

Supplier SolarWorld said that renewable energy projects were having a positive effect in boardrooms where members were concerned about rising energy costs.

"These are projects which are eye openers for the corporate world where decision makers realise that there are companies who take the first step. It's a proof that it [solar] is already financially viable," Gregor Küpper, managing director for SolarWorld Africa told News24.

Woolworths also said that renewable energy efforts as well as energy efficient practices had seen a significant cost saving.


"We've got the stage now where we've saved about 27% on relative energy use from the benchmark we set in 2004 just through the efforts of our teams over that time," said Justin Smith, Woolworths sustainability manager.

While domestic users in SA account for around 17% of consumption, industry uses 37.7% and mining 15% of supply, according to the government gazette on electricity pricing policy of 2008.

According to Küpper, businesses are starting to see real-world benefits of renewable energy.

"Agri-business is starting to see the long-term advantages of investment in renewables through the environmental and economic benefits."

- Follow Duncan on Twitter
Read more on:    vodacom  |  woolworths  |  renewable energy

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