The Cape Town scheme that lets you sell electricity to the grid – just don’t call it a feed-in tarif

edited January 2015 in Site discussion

imageThe Cape Town scheme that lets you sell electricity to the grid – just don’t call it a feed-in tariff... -

Capetonians can sell energy back to the grid, when will the rest of South Africa be able to do the same.

Read the full story here


  • This is some really great reporting - well done Adam!
  • @ebendl Thanks - to be honest Brian was the great interviewee. He managed to explain a lot of the issues in an open and honest way that you just don't hear often enough. Much as Eskom is a swear word in the office in the moment, it's good to be reminded that the challenges utilities have are very different here even before the layers of incompetence and bad management kick in.
  • The Nelson Mandela Bay Municipality allows grid-tie on a 1-1 basis - much more generous than Cape Town's scheme.
  • @MyPE Wow - what an oversight on my behalf. I was under the impression that NMB was trialling a scheme and that there are guidelines in place, but that it wasn't open to the public yet. Have you got a link or contact you can send me (adam at htxt co za) I can follow up with? The municipality site looks a bit out of date - talks about offering a FIT that's better than 1:1 at 65c a unit!

    Also - wind has to be the way to go in PE :)
  • DirkDirk Hout Bay
    I appreciate this article as I have just installed a solar PV system at my house at a cost of R130 000. I can understand the reasons that Brian is giving for why we have to pay to feed electricity back into the grid and why we can't sell electricity back to the Eskom/Municipality - if we look purely at the economic figures from Eskom/Municipality point of view. However, if you consider the effect of load shedding on the country as a whole, and add global warming to the picture, I think we can be more creative in South Africa.

    We cannot only look at the isolated picture from an Eskom's/Municipality's economic point of view - and I appreciate that it is a key issue. The issue is bigger than that. The lack of electricity currently constraints the economic growth rate of South Africa. It result in people losing their jobs and discourages foreign investment - who wants to invest in a country where you are not guaranteed of electricity?

    We need electricity in this country like a desert needs rain! We need it sooner rather than later, and while we are at it, why not make it "green"?

    If Germany can produce 7% of electricity demand via private individuals installing PV panels on their roofs, how much more can South Africa produce considering the amount of sunshine we have in this country? PV panels on roofs is one of the quickest ways to add a huge amount of electricity to the grid - if there are incentives for people do so.

    The argument also goes further than pure economics. It also has to do with the generation of renewable energy compared to electricity generated from fossil fuels. The "green" factor is mostly overlooked in South Africa when it comes to arguments related to feeding electricity back into the grid. So rather than focussing on reasons why we cannot feed electricity back into the grid, government (local and national), in combination with Eskom, should rather focus on how CAN we get more PV solar panels installed on rooftops. It is really astonishing to me that the issue of an electricity shortage in this country was identified in 2008 already and now, 7 years later, all that was done was to plan the building new coal fired power stations - which will just add to the global warming problems.

    Surely we can be more creative in this country? Sure, we need to provide electricity to everybody - I do believe that access to affordable electricity should be a basic human right. But if you look at the total picture it must be cheaper in the long term to harvest electricity from the sun compared to building coal fired power stations (or even nuclear)? Eskom should (is) not be a profit making organisation (it is government owned after all and not a private enterprise) - but should be operated in a way that is to the benefit of all South Africans. "Benefit" doesn't only means supplying everybody in South Africa with electricity, but also to benefit all South Africans by stimulating economic growth.

    I don't want to make money out of my system. I just want to be able to recover my capital while producing "green electricity" which is basically free (once the capital costs have been recovered). I don't mind paying a levy for being able to pump electricity into the grid, but at least be provided with some kind of incentive that will reduce my payback period from 10 years plus to around 5 years.
    South Africa can take the lead from (other?) first world countries and provide some kind of incentive for individuals to pump back "free" electricity into the grid.

    I was in the US a year or two ago, and discussed home electricity generation via PV panels with a supplier, and with all the tax breaks etc., it would take a home owner there approximately 3 years to recover his capital investment. Why do we in South Africa, where we have such a dire need for electricity, have more barriers than incentives to utilize the abundant solar energy that is available to us?

    The question should always be "How are we going to utilise solar energy in South Africa?", and never just reasons why we cant do it or why it is difficult to do it. If the pure economic calculations doesn't add up 100% at the moment, it definitely will if you consider economic growth and the effects of global warming in the equation.

  • @dirk

    I was in the US a year or two ago, and discussed home electricity generation via PV panels with a supplier, and with all the tax breaks etc., it would take a home owner there approximately 3 years to recover his capital investment.
    I couldn't agree more. The thing is, when people do the raw price comparisons between renewables and traditional energy sources, they very rarely look to 25 years into the future. As you say, the cost of installing solar might be relatively expensive now, but the one thing we know for sure is that the cost of traditionally derived energy is going up (I think most people agree the current oil price is a blip rather than a long term trend) while the cost from renewables plummets after the capital investment has been recouped and can be easily managed in the future. Plus, lots of small scale production means we're less at risk of losing everything when there's a fault in one station - as we appear to be now.

    R130 000 seems like great value by the way - who was the supplier?
  • Xiao DuXiao Du Cape Town
    Cape Town is vehemently anti-solar to be blunt. Policies in place basically force you to go off-grid (which isn't a bad thing, but it costs roughly double - I've gone that route), or connnect up illegally (which a lot of people have done, judging from looking at the various blogs for installers sites in Cape Town).

    My blog may be interesting reading -
    I need to update it with my latest offgrid install at my plot though (only documents my grid tied -> offgrid so far).
  • @Xiao%20Du Neat blog - if you've got any photos we'd love to have a chat about your installation.
  • Thanks for a good honest insight into Escom's and Cape Town's double standards. From the asymmetric fee-structure it is clear that, in order not to be sucked dry by a government and parastatals like Escom, one should become self-sufficient as soon as possible.
  • MacAfricanMacAfrican Paarl
    edited May 2015
    By the way, Drakenstein council (Paarl, Wellington and surrounds) has a brilliant scheme. You pay a little bit more in total fixed fee per month, but then you get 1:1 credits for anything you export AND what you still draw from the grid is at a cheaper rate, subject only to your being a net consumer. They zero the net meter every 30 June.

    In illustration: commercial user with 150A three phase connection:
    Normally pays R1800pm and 124.9c/kWh all ex VAT
    Embedded PV user pays R2200pm but only 100c/kWh for net draw

    They will fix the obvious hole in design that a big commercial user puts up just 2 little panels in order to drop from 125c to 100c on what will still be the same grid consumption

    Let's say the commercial user was using 150,000kWh per year
    Has big roofspace and puts in 75KW of solar
    His 2015 bill drops from circa R210k to circa R60k
    Not bad for a R1.2m investment that kicks huge tax benefits almost immediately

    R1.2m after the tax schemes is really more like R800k and the R150k saving becomes R180k next year and R220k the year after...

  • @{MacAfrican} Thanks for the heads up about that. We'll definitely investigate it.
  • edited June 2015
    When municipalities use electricity as a revenue generation tool and for political gain, it's bound to come back and bite in the end. The well off consumer will use less by installing solar (water) geysers, solar panels, LED lighting and efficient appliances. The relatively poor will therefore use relatively more.

    As for grid tied solar/wind. The solution is so simple. Remove finance from the equation. Think of the grid as a replacement for batteries. Contribute now, use later. Instead of "selling and buying" with very real tax implication, think instead of storage. A percentage can be removed in the same way that batteries aren't 100% efficient to be used by the utility to sell to cover infrastructure.

    So, as follows.

    Store 1kW on the grid during peak time, get .9kW credit back.
    Store 1kW on the grid during off peak time, get .7kW credit back.

    No money, no tax and the meter keeps the credit. Simple.

    Furthermore, this is free from demographic. The small installation receives the same benefit as the big.
  • On the 18th January 0.1% of Germany's daily demand came from solar panels. Solar Panels is most of the time useless and only a political experiment. Germany's Power Grit will collapse in near future while 3000000 households electricity is been cut every month thanks to solar.
  • edited July 2015
    @{Oes Does} Well yes, but then that's a stat that's just as biased as the one about the best day for solar. Everyone knows that renewables need to be carefully managed to match supply and demand using a variety of resources.

    Looking at the more meaningful bigger picture, for the whole of 2014 (for that was where your stat came from, not this year) between 11% of all German power consumption came from renewables and 26% of its primary electricity generation was from renewables (

    It's simple enough - in the middle of winter (January) there's not much sun. But there's loads of wind ( Over 8TWh of it last December, for example.
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