The privatisation of power in South Africa’s suburban homes has started. Faced with constant load shedding and a state utility in crisis, a power revolution is starting to take shape among South Africa’s middle classes.
Even without the burden of load shedding, Eskom’s latest plans will leave many households thinking of ways to privatise their energy supplies.
Eskom is asking for a tariff hike of 25.3% from July 1, double the initial expected increase. The state utility will ask the National Energy Regulator of SA to process a new application.
Already, Johannesburg suburb Parkhurst has contracted energy companies to get 2 000 homes in the suburb to generate their own – mostly solar – power.
And in Pretoria, a new cluster development in Waterkloof called Greenhill is using freedom from Eskom – with beautiful solar roofs – as a unique selling point.
Inus Dreckmeyr, whose business advises and supplies local businesses with products, said reliability of power supply was the main reason people were contemplating going offthegrid.
“I’m talking to a lot of normal suburban households. They want solutions. They want to know how they can rid themselves of Eskom,” Dreckmeyr said.
“It is not only about going offthegrid and living a greener life for most of my customers; it is to lessen the grip Eskom has on how reliable your power supply is,” he said. “But the cost of such a project makes people think twice.”
While solar panels are decreasing in cost every year, it is the cost of energy storage that still represents a major investment to start powering up your home.
US-based tech superstar Elon Musk’s latest gizmo, the Powerwall, has taken the first steps to helping suburban households become self-sufficient. Launched by Musk’s company Tesla earlier this year, the battery can hold enough energy to power a home for up to five hours.
The primary market for the Powerwall is households with solar panels, or those planning to install them.
Futurists have hailed the battery as an affordable way to store energy generated by renewable power sources, but the Powerwall still comes at a high price for most South Africans.
The standard model has a capacity of 7 kilowatt-hours. A normal middle class South African household consumes between 20kWh and 30kWh a day, thus a household would need two Powerwalls to be totally offthegrid for an entire day.
The cheapest Powerwall was launched at a price of $3 000 (around R36 000, excluding import taxes) and will only be available by the end of next year. The company has received a flood of orders, reportedly also from South African distributors.
This week, Bloomberg quoted JB Straubel, Tesla Motors’ chief technical officer and co-founder, as saying that South Africa could be a huge market for battery storage because of consistent power blackouts in the country.
But in all likelihood, South Africa would only see a Powerwall in 2017 – and then only if you are lucky enough to secure an order.
In the meantime, some South African companies have a similar product on offer. South African tech company Freedom Won is using much the same technology as Tesla to manufacture their 10kWh model, the FreedomCOR.
The FreedomCOR costs R59 000. The batteries can serve for up to 20 years with no maintenance, which means the entire installation should provide 20 years of cost-free operation.
Freedom Won owner Antony English said that for an off-grid solution you would need a solar panel array on the roof, along with a charge controller to charge the battery during the day. The battery would then run the house at night.
He said that for an average three-bedroom house to run offthegrid, the solution would cost about R300 000.
“Compared with the expected increasing costs of utility energy, a Freedom Won battery with solar energy will, if financed in a 20-year home loan, cost less a month after year five than Eskom power, and will provide huge savings over the life of the system,” he said.
English said the uptake had been excellent. “We expect our order total to reach 100 units by August.”
At the moment, consultants such as Dreckmeyr use the more traditional-technology batteries, which he said worked well with South Africa’s unreliable grid. He said he would not advise households to abandon Eskom completely.
“You can rig your house to supply 95% of its own energy,” he said. “But it might rain for a few days or you might have the family for a visit for a few days.
Then your installed capacity would not be enough and you can switch back to Eskom.”
All of this might seem pricey, but in the bigger scheme of things, the economics start to make sense. A normal middle class home would need about 12 250W photovoltaic solar panels, which retail for about R3 500. Plus, of course, the batteries, inverter and other switchgear. Analysts say this system could produce electricity at 84c per kilowatt-hour by the end of this year.
A unit of Eskom electricity is hovering at about R2 per kilowatt-hour.
And with a 25% hike in the pipeline, a solar power retrofit might not be a bad investment.
Inus Dreckmeyr’s Netshield SA uses a basic formula when advising customers on the costs of producing 95% of a household or business’ energy needs. He describes it as a useful tool to see how much your household has to pay to rid itself of Eskom.
The first step is to look at your monthly energy bill. Then multiply the monthly amount by 12 and then seven years, adding 15% interest on to every year.
For a R400 monthly bill, it will cost you R53 000 to make your house self-sufficient.
For an R800 bill, you will need R106 000.
A R1 000 bill will cost you R132 000 and a R2 000 bill will cost R266 000.