The city of Cape Town will soon start paying commercial and Industrial (C&I) business for their excess solar with cash as one of the options on the table. Interested businesses that want to sell their surplus Small-scale Embedded Generation (SSEG) energy to the City of Cape Town need to submit their applications by the 31st of August. The current call is strictly for businesses, and residential customers should look out for similar calls in the near future. Late applications for this call will be considered for the next rounds. The City of Cape Town says this current round is the first of many calls as it seeks to boost electricity generation in the region.
Surplus energy will be bought at the approved City SSEG feed-in tariffs, and eligible commercial electricity customers can choose to be compensated in one of the following ways:
- Off-setting credit against your electricity account
- Off-setting credit against your rates account or another account in your name
A look on the City of Cape Town’s website shows that the businesses in Cape Town will get a feed-in tariff of 73.87 c/kWh (South African Rand cents). This is about $0.05/ kWh.
The rooftop solar market is growing rapidly in several markets around the world and continues to break records in terms of MWs installed per year. The Australian market is a fine example of what can be achieved in the home solar market. Australia’s Ministry for Industry, Energy and Emissions Reduction in March this year reported that 2021 was the fifth record-breaking year in a row for rooftop solar in Australia. In 2021, Australians installed approximately 380,000 new systems with a combined capacity of 3.2 GW. More than 3 million rooftops in Australia now have solar, bringing the total installed capacity to an awesome 17 GW! “Last year $7.4 billion or $284 per person was invested in renewable energy in Australia. This puts us ahead of countries including Canada, Germany, Japan, France, China and the United States on a per person basis,” Minister Taylor said earlier this year.
Vietnam is another market where rooftop solar was able to add to the country’s generation capacity in a short space of time thanks to some good feed-in policies. There are now over 101,000 rooftop solar systems deployed over residential, commercial and industrial premises across the country and 9,000 MW of rooftop solar was added very quickly.
The 3 compensation methods offered by the city of Cape Town are a welcome development and should help accelerate the adoption of rooftop solar.
In the first option, excess energy can be offset against their electricity bill, helping to improve the payback period and the overall business case for rooftop solar.
The second option is one I am very excited about from the things I have seen in my 7 years in the solar sector across East and Southern Africa. There are thousands of firms that have operations in multiple locations and quite a number of locations may not be ideal for solar for a number of seasons. These could include:
- Limited space to put a reasonable solar pv array to meet the businesses requirements to a level that makes financial sense
- Shading from neighboring buildings in and around high-rise environments
- Buildings with roofs with the wrong orientation
- Restrictions around historic / heritage sites
- Landlord’s restrictions and preferences
The option to offset credit against another account in your name opens up the opportunity for firms to install large solar systems at sites where they have the space and then offset some electricity bills at other sites where their consumption is high but are not able to install solar. Examples of these are firms with large warehouses and car parks that have loads of roof space and ground space for MWs of solar, but they consume very little. They could then offset this against some of their other high consumption properties.
Schools, universities, and other institutions that have periods of low consumption when campuses are closed for the holidays will also benefit from this feed-in program. Commercial offices which usually have low consumption on weekends and also now on weekdays due to the new work from home culture that was induced by the coronavirus pandemic lockdowns will also benefit from this new program, by selling excess generation to the city.
South Africa is going through its worst ever period of load-shedding and needs all the new generation capacity it can get, and it needs it fast! Accelerating the adoption of rooftop solar is one of the pathways to help address the load-shedding issue.
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