Time is 'right' for Solar energy

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)
Cape Town - The solar energy market is maturing to the point where installations are becoming viable, particularly as the cost of electricity goes up, an industry player has said.

Major corporations Vodacom and Woolworths recently unveiled solar photovoltaic installations that allow the companies to save money on their energy bills.

"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's [solar] is already financially viable," Gregor Küpper, managing director for SolarWorld Africa told News24.

He added that the solar energy made financial sense, despite the initial capital investment. The installation on the Vodacom building outside Cape Town cost R10m, but the company expects that payback to be in just of over five years, after the latest Eskom price hike comes into effect.

"Yes we are already there. It's viable and it does make financial sense. We just have to look into a couple of administrative hurdles.

"First of all, you're not allowed in general to generate electricity yourself and feed it back into the grid so the main hurdle is to convince the municipality to accept a system like this to be connected to the grid," said Küpper.

Excess energy

The current system does not generally allow for two way metering of electricity and Küpper said that it represented a challenge for users who were interested in invested in solar installations.

"It's a problem that can be solved. I know the DOE [department of energy] has consultants that are looking into the rollout of medium and small sized systems on commercial and domestic applications, definitely with the goal of feeding back into the grid."

There a couple of generally accepted ways that electricity can be managed for users who generate their own power: The grid exchange method allows users to effectively use the grid as a storage device where electricity privately generated can be used when required.

Under the refit tariff, users get paid for generating excess energy, but Küpper said the latter is more expensive to manage for SA.

"Both ways are viable; the refit tariff is, in the beginning the more expensive way for South Africa," he said, adding that smaller retailers and domestic would likely be attracted to such a system.

He rejected the building of a massive solar plant in a province with abundant sunshine like the Northern Cape, saying that such an installations presented its own problems, despite the benefit of the solar energy.

"From my point of the best way is to decentralise. If you've got a massive plant somewhere, you've got the build the infrastructure - you have to transport the electricity; you've got losses in the transport transmission lines."


He added that in isolated rural areas, there are several solar installations that supply 30% of the local energy requirements. These areas are often not served by the national grid.

"By the way it's also cheaper because you don't have to build infrastructure. It's not a mega project; it's a lot of smaller projects very often financed by private persons or company owners," Küpper said of local solar installations.

Nersa (the National Energy Regulator of South Africa) recently approved a further 8% hike in the price of electricity after Eskom initially applied for a 16% increase.

The area also widespread fears that domestic users are being forced to subsidise Eskom's deals with large industrial users.

Domestic users in SA account for around 17% of consumption, while industry takes up 37.7% and mining 15%, according to the government gazette on electricity pricing policy of 2008.

Woolworths has managed to save around 27% in costs from a 2004 benchmark through renewable energy efforts and Vodacom's SolarWorld panels can supply up to 75% of the building's energy requirements.

- Follow Duncan on Twitter
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