Finding a solution to increasing electricity costs in South Africa

Published 1 Jun, 2021

There are few countries where solar energy has such enormous potential as South Africa. With over 2,500 hours of sunshine per year, it is one of the sunniest countries on earth. Nevertheless, the share of Solar PV in South Africa’s energy mix is only 4% and in comparison the Netherlands has more than 5 times more rooftop PV installed. In addition, electricity prices keep on rising having tripled over the last 10 years and are expected to increase 15% year on year. Let alone the load shedding. A report published in March by the Council for Scientific and Industrial Research (CSIR) shows that South Africa now spends more than 10% of the year load shedding, which has serious knock-on effects for business and consumers.

Easing the transition over to Solar PV

So why is the Solar PV uptake still so limited? Leading obstacles for commercial businesses to transition over to the use of Solar PV, are access to finance and the hassle of procuring, installing and operating a solar plant. There are, however, solar lease companies which can ease the burden and Enie is one of them. Enie removes these obstacles through a 10 year lease proposition . The funding of the Dutch green bank Triodos underwritten by the Dutch government, allows Enie to offer Solar PV at a lower capital rate. Combined with the buying power of panels, inverters and inverters plus their expertise, Enie’s offer is attractive to businesses that can benefit from Solar power.

Cutting electricity costs

With more than 2 MW of projects installed, in most cases, the client saves from day one since Enie kWh price is lower than the utility (Eskom/Municipal) price. Take for instance, a Citrus farmer in the Cederberg who runs its irrigation pumps to water the 80ha of Citrus. By installing an 80 kWp PV system, during the day Solar PV takes over and reduces the Eskom bill with more than 50%. Every kWh generated by Solar PV is cheaper than the Eskom tariff. Bear in mind the yearly escalation, this farmer will grow his fruits powered by the sun and saving on electricity costs.

Further benefits of going solar

Self-generation by using Solar PV can easily free up 5 GW of the constrained South African energy system. All in a short period of time because the installation of Solar PV for business and farms takes only a couple of weeks. And there is another benefit, moving away from SA’s coal dominant energy mix will help fighting climate change and save water. For every kWh generated with coal, 0.1 litres of water are needed. In the case of South Africa, that equates to roughly the amount of 30,000 Olympic swimming pools per year. The prolonged drought in parts of the Eastern, Northern and Western Cape which has caused water shortages, widespread crop failure and negatively affected both commercial and subsistence farming. It drives up food prices and affects the broader economy, as the yield of key agricultural exports declines.

Enie Solar Zevenwacht - Club of Engineers
Enie Solar Stellenbosch - Club of Engineers
Enie Solar - Club of Engineers

meet the author

René Laks is a seasoned sales and general management professional with more than 20 years international business experience within Business to Business, in particular in the Oil & Gas, Biogas and the Solar Industry. After he spent a decade of his career in the  fossil fuel industry mostly with Shell, he gradually moved into the renewable energy space, trading in molecules for electrons.

In 2015, he moved to Cape Town with his family and settled in Hout Bay, trading the grey Dutch skies for a ‘high risk, high reward’ life between two oceans. This step was driven by a deep love for South Africa and by the ambition to contribute considerably to the energy transition on the African continent. With Gijs, the founder of COE, Rene not only met fellow countrymen, but also a like-minded professional both with the ambition to further shape (South) Africa’s energy future.

René currently heads up Enie is one of Europe’s leading Solar Lease companies that decided to enter the South African market in 2020. COE is assisting Enie and Rene with staffing and engineering services.

Rene Laks
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