Solar panels' shine leaves Eskom, municipal sales in the dark

The migration of residents and businesses away from the grid to solar panels is resulting in the government losing millions in revenue, says Pravin Gordhan.

Answering questions from DA MP Ghaleb Cachalia in parliament this week, the public enterprises minister said solar panel-generated electricity increased by 350% from March 2022 to March this year.

“This increase in reliance on renewable energy is a welcome development for the environment, but poses a significant challenge to municipalities, which derive the majority of their income from electricity sales,” Gordhan said.

Among those affected was Buffalo City in East London, which lost R350m, he said.

“The uptake has been driven largely by customers seeking alternative energy sources due to load-shedding, followed by those wanting to buffer against the upward annual electricity tariff trends and those pursuing greener options aligned with climate change objectives. 

“The uptake of small-scale embedded generators (SSEGs) has resulted in the displacement of traditional grid-supplied energy volumes."

This year’s uptake was further accelerated by incentive programmes like the Sars tax rebates, attractive distributor feed-in tariffs such as those in Cape Town and the National Treasury energy loan guarantee scheme, he added.

In April, Cape Town said it would invest millions in independent power suppliers to stabilise the grid and minimise the effect of load-shedding.

“Customers with SSEG installations realise a reduction of about 39% on their overall electricity bill, which translates into a 21% impact on the Eskom margin," said Gordhan.