South Africa's persistent electricity challenges have prompted innovative solutions to alleviate the burden on the power grid. One such strategy gaining traction is enabling homeowners and businesses to sell their surplus self-generated electricity back to the grid.
While Eskom's plans regarding customer "feed-in" to the grid remain uncertain, the City of Cape Town has taken swift action. In January 2023, the city announced it had secured an exemption from National Treasury to compensate homeowners for excess energy, commencing later in the year. The City of Tshwane has also expressed interest in purchasing excess solar electricity and opened applications for small-scale embedded generation (SSEG) systems in March.
What's in It for You? The burning question for many is, "How much can you earn by selling electricity back to the grid?" Currently, neither Eskom nor municipalities have provided comprehensive information about the mechanics or compensation rates for power buy-back schemes. However, the City of Cape Town's approach provides some insights.
One noteworthy revelation in the municipality's announcement is the approval of a 'feed-in' rate by the National Energy Regulator of South Africa, set at 78.98 cents per kilowatt-hour (kWh) for the fiscal year.
Cape Town also disclosed an additional 25 cents per kWh incentive, resulting in a total rate of 103.98 cents per kWh.
It's crucial to note that residential customers are currently required to be 'net consumers' of electricity, meaning they must buy more electricity from the municipality than they sell back. The city is actively working to lift this restriction.
Regarding compensation, Cape Town intends to offset the amount against the customer's total monthly municipal account and any other linked municipal accounts. Any remaining credit after the offset will be reimbursed to the customer, but only for amounts exceeding R1,000. Amounts less than R1,000 will accrue until they reach the R1,000 threshold, paid out annually.
What Do You Need? While the opportunity is enticing, there are essential considerations for households.
Renewable energy consultant and News24 columnist, Nick Hedley, highlights the primary hurdle: the cost of a bi-directional meter. Unlike a standard meter that allows electricity to flow into a property, a bi-directional meter permits electricity flow in both directions, into the property and back to the grid.
Currently, the approved bi-directional meter comes at a hefty cost of nearly R13,000. For the average household, this investment might not be economically viable given the current feed-in tariff rates. However, there is hope, as more affordable locally-made meters are emerging, priced around R2,000. This cost reduction could make it feasible for average customers to invest in bi-directional meters, provided municipalities and providers prioritize affordability.
Additionally, households should budget for installation costs, including the bi-directional meter, and a monthly R100 admin fee charged by the City of Cape Town for monitoring electricity flow.
Regardless of location, you'll need approval from Eskom or your municipality for your solar installation, sometimes incurring a fee. Don't forget to consult your electricity provider about any additional requirements, such as metering and tariff adjustments.
Selling excess solar energy offers exciting potential, but it's essential to weigh the costs and requirements against the expected returns to make an informed decision.
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