Cape Town plans to make it more lucrative for residents to sell excess power back to the city by introducing a cash incentive.
The new measure adds to an existing initiative that allows people to offset their municipal bill with excess power they generate.
“At the moment we give you a credit for the power you sell to us. So we allow you to run your council bill down to zero, if that's how much you sell to us. But it cannot go further than zero,” said Cape Town mayor Geordin Hill-Lewis.
“We will now start paying people. We will EFT you for the power you sell us,” he added.
Hill-Lewis said the incentive would be announced soon and the city would then ask residents to apply to be suppliers.
“I hope this will be a game-changer,” Hill-Lewis said.
The number of residents who have invested in solar systems has skyrocketed in recent years due to load-shedding and spiralling electricity costs.
Tyger Geldenhuis, founder of Trust Solar, described the demand for such systems as “frenzy”. He said his business turnover had tripled every year since 2009, hitting R50m last year.
Milnerton resident Peter Walsh paid about R200,000 for his system and now only needs to rely on Eskom “on the odd occasion”.
“I was paying between R3,500 and R4,500 (a month) depending on the season. Now I never spend more than R500 a month,” he added.
Walsh calculates he will have recouped the cost of his investment in four-and-a-half to five years based on his monthly savings. Some banks are now offering financing for solar systems, which is how Walsh was able to afford his.
“It was a tough ask financially, but it was a good decision,” he said.
However, the benefits of the Cape Town initiative are limited.
According to Geldenhuis, based on the numbers, it’s not yet worth it and most of his clients don’t bother. “We’ve done more than 1,000 houses and I don’t think even one percent are selling back,” he said.
First, residents are charged a service tariff of about R450 a month by the city and have to install a bidirectional meter, which costs between R10,000 and R15,000.
Additionally, over a year residents must be net consumers, which means they must consume more power than they generate to sell back units.
“If you look at what the city requires of a home installation to ‘sell’ back to the city, it’s not viable. The money they pay you and the monthly subscription and investment make it a non-starter,” said Walsh.
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