Cape Town is the first city in South Africa to offer households and businesses cash for their excess rooftop solar power. The City is set to start paying businesses cash for power beginning next month, and residents will be able to start selling power for cash later this year.
This follows announcements last year that surplus energy will be bought at the approved City Small Scale Embedded Generation (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
- Payment in cash
The City’s so-called “Power Heroes” campaign aims to buy electricity from as many City-supplied customers as are willing to sell, and that these customers may now produce as much power as they can from their approved systems and feed it into Cape Town’s grid.
The National Energy Regulator of South Africa (NERSA) had approved a rate of South African Rand 78.98c/kWh (USD 0.4 cents/kWh) for the last financial year for the City to pay power sellers. To further incentivize prosumers, the City also adds a South African Rand 25c/kWh incentive tariff on top of this. As part of the City’s latest budget, the City proposed to raise this feed-in tariff by 10.15%. The City adds, “This makes solar even more attractive. We want as many residents and businesses as possible to help us end load-shedding over time, and there are no limits to how much power you can sell us.”
In an update shared by the City of Cape Town this morning, Cape Town Mayor Geordin Hill-Lewis said, “Power Heroes will put the power to end load-shedding in every home. In fact, should just 25,000 of Cape Town’s more than 600,000 electricity customers sign up as Power Heroes, we can protect against an additional one full stage of load-shedding during peak hours. And for every 20,000 customers we add to the program, we will be able to expand the hours of the day that we can protect against load-shedding. The program is entirely voluntary, and costs nothing for those who sign up, so we are calling on as many families as possible to sign up to be Power Heroes.”
Eskom’s load-shedding program is structured in stages, where Eskom sheds a certain quantum of load from the grid to stabilize the grid. So, depending on the severity of the crisis, load-shedding is implemented in stages from Stage 1 to Stage 8, where Stage 1 sheds 1,000 MW of load from the grid, and in a Stage 8 scenario, Eskom takes out 8,000 MW of load from the grid. Load-shedding is implemented over 2-hour or 4-hour blocks on a rotational basis depending on the severity of the crises. Stage 8, however, means most consumers will experience a blackout for about 12 hours.
As stated by the Mayor, should just 25,000 of Cape Town’s more than 600,000 electricity customers sign up as Power Heroes, the City can protect against an additional one full stage of load-shedding during peak hours. It just goes to show how much rooftop solar systems can have a powerful effect. I hope more cities in South Africa and the region adopt similar programs.
Cape Town is forging ahead with its three-phase procurement to end load-shedding, with the goal of protecting residents from the first four stages of Eskom’s load-shedding within three years.
Councillor Beverley van Reenen, Mayoral Committee Member for Energy, said the City will this year award contracts for 200 MW of renewable energy, with 500 MW of dispatchable energy currently out on tender.
“These initiatives take place alongside key municipal generation projects, such as the Steenbras Hydro Pumped Storage Scheme, which aims to save up to two stages where possible, and the forthcoming R1.2bn solar plant and battery project on a portion of Paardevlei in Somerset West, capable of providing a full stage of load-shedding protection during the day,” said Cllr van Reenen.
The city’s incentive program, as well as the incessant electricity rationing program infamously known as load-shedding that is currently being implemented by the national utility company Eskom, have contributed to increasing appetite for solar installations for homes and businesses in Cape Town. Cape Town Mayor Geordin Hill-Lewis says the appetite for rooftop solar PV is at record levels in the city, with March 2023 now the best month on record for new applications to install solar. This, as residents look to capitalize on the City’s incentive programs to help end load-shedding over time.
February may have shattered all records for solar PV installation applications to the City, but March and April have both already surpassed that. The City has already received 2,333 solar PV installation applications so far this year, with close to 700 in March alone, making it the biggest month to date. Just the first four months of 2023 account for a sizable 21% of all solar PV applications received since records began. These figures show an energized market response to Cape Town’s incentives for businesses and residents with solar PV generation capacity.
“Most of Cape Town’s installed solar PV capacity is commercial, but residential applications are what’s driving record-breaking interest levels. This clearly shows the effect of our policy shift to expand how we are actively supporting the uptake of safe and legal solar installations. To make going solar even more attractive, the City is raising the residential small scale embedded generation tariff by 10,15% for 2023/24, plus a 25c per kWh incentive. The City is also significantly reducing the monthly AMI meter Administration fee in 2023/24. This is aside from the new national tax incentives for solar PV investment,” said Mayor Hill-Lewis.
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