Do Eskom & municipalities really hate consumer renewables?

James Green, SESSA Solar Water Heating Chair

There is a simple problem. Both Eskom, and municipalities as resellers of electricity, derive income from the sale of kWh’s. Reduce the sale of kWh’s and their income goes down, but they still have the costs of maintenance and new builds to pay off, ignoring their normal other overheads of coal and personnel.

Rooftop PV

The more people that embrace consumer renewables in the form of solar water heaters and rooftop solar PV, the greater the reduction in kWh sales. This in turn puts even more pressure on the prices needed per kWh to meet the overheads, or in the case of municipalities to provide services. 

Sooner or later the price of a solar kWh will become cheaper than the cost of fossil fuel power, arguably with some solar thermal kWh savings it has already arrived, and in a few years time when electricity prices have increased even further the cross over point of rooftop solar PV will also be cheaper. 

The surge of interest in rooftop solar PV has partially been fuelled by Eskom load shedding, but unlike in much of Europe, the ability to feed back into the grid is either difficult to arrange, or the payment from the municipality makes it unattractive and sometimes more expensive than staying with grid power. Running meters backwards without permission can result in fines up to R25,000.

Unless the PV output is 1,5MW or above, the effort and cost of helping SA’s energy mix through feeding back solar PV power is just not worth it, and smaller installations should be installed on the merits of saving home or business kWh consumption, without regard to Eskom or the municipalities. 

As water heating in the home accounts for typically 40%-60% of monthly consumption, it should be considered first, not only because it is much cheaper per kWh replaced than PV, but both the payback period and return on investment are more attractive.

Eskom’s attitude towards energy saving is questionable. In the days of solar water heating rebates the incentive was skewed in favour of inefficient SWH systems, which would not only be insufficient to replace the hot water consumed in the home, but would also require electrical back up to be used to heat the required volumes, but not during Eskom peak periods. Indeed Eskom even penalized the more efficient systems. Cynically and realistically this was Eskom saying ‘Save Power but on our terms’, when it suits us, and when we have a problem, during the evening and morning peak, (when water heating is a major contributor).

Government disinterest in consumer renewables, both SWH and rooftop solar PV, is understandable. Less glamorous than large scale renewable energy generation, PV, CSP, wind, and bigger MW generation through nuclear and gas provides multiple opportunities.  Consumer renewables in contrast is putting power (both literally and physically) in the hands of the people. 

From a business perspective consumer renewables are a threat to Eskom and municipalities. Hate them, not really, but confronting the reality is uncomfortable. By 2030 when it is inevitable that the majority of middle and upper income homes will have SWH’s or rooftop PV, or both, (the financial investment will have become irresistible), much in the same way as cellphones, Internet, social media were unstoppable, government attitudes and power supplier arrogance will face different dynamics to today.