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Solar expert weighs in on president’s plan to reduce loadshedding

Home solar is still South Africa’s most reasonable short-term solution to the growing energy crisis, notes solar expert Rein Snoeck Henkemans, Managing Director of Alumo Energy.

Of the five key interventions outlined by President Cyril Ramaphosa during his 2023 State of the Nation Address (SoNA), home and business solar generation is the only immediately available, feasible, and inexpensive option relative to the other more ambitious, time-intensive, and expensive options, he says.

“The inescapable fact of the matter is that we need a working solution today, not a couple of years from now. We have experienced close to a thousand hours of loadshedding this year alone. If this trend continues, it is impossible to know or even guess how much it will cost the average person or business owner in the long term,” he says.

“Ultimately, our economy needs more grid-supplied energy, but repairing Eskom’s coal stations, accelerating investment into generation, procuring more renewable gas and battery storage capacity, and the vague ‘transforming the electricity sector’ options mentioned during SoNA will take too long and cost the taxpayer far too much.”

He adds that the government and Eskom’s actions are commendable, but warns that the proposed temporary solutions to fast-track construction on three generation units at Kusile, recruit skilled personnel to underperforming stations, and secure 300 megawatts from neighbouring countries is akin to putting a bandage on a deep wound.

There is some encouraging news for the future of solar

“The address gave us at least one flickering ray of hope. The President promises to implement a tax incentive for solar, which may prove to be a sizable step in the right direction. Currently, we have no information on the conditions or extent of the incentive, but if this proves to be substantial enough, we could enter a golden age for solar which will significantly benefit business and households,” says Snoeck Henkemans.

He explains that solar is already a far more affordable option than many people realise. With a rent-to-own package, households may pay an amount quite similar to their current electricity bill for a fairly high-capacity solar system.

Although this option would not take a household completely off the grid, it does allow for continued electricity access during loadshedding, and considerably lower electricity bills. Given that Alumo Energy recommends using solar for up to 80% of a household’s electricity needs rather than attempting to go completely off-grid, this represents a highly attractive solar solution.

“Additionally, with this purported tax incentive, solar could become South Africa’s energy generation solution of choice in the coming years, especially if government takes additional steps to promote its use.”

The bounce-back loan scheme implemented during Covid-19 to help businesses get back on their feet may be the additional support that the solar industry needs.

President Ramaphosa stated that the National Treasury is working to adjust the loan scheme to help small businesses invest in solar equipment. Additionally, banks and development finance institutions will be able to borrow directly from the scheme to facilitate the lease of solar systems.

“This is South Africa’s eleventh hour. We don’t have the luxury to sit on our hands and hope that the problem resolves itself. Unfortunately, this is not just Eskom and the government’s problem, but ours as well. As such, we have to take up the task of finding a solution. For households and business owners, that means turning to solar and reducing dependency on the grid.”

He points out that this will further mean partially sidestepping the upcoming 18.65% electricity tariff increase in April, as well as the proposed 12.74% increase for next year.

“It remains to be seen how many of these commitments will be realised this year, and to what degree they will resolve the country’s energy crisis. Until then, I recommend looking at all the available options, considering the best course of action, and getting solar installed by a reputable provider sooner rather than later.”