South Africa has one of the best solar resources in the world, photovoltaic ‘PV’ modules are the cheapest they have ever been (with the landed price dropping more than 50% in the last year) and grid connected systems are now at, or very near, to grid parity where the cost of electricity produced from privately-owned rooftop PV modules is equal to, or less than, the cost that the consumer would be paying for electricity from the grid.
Geared to go Green
Furthermore, with the spectre of load-shedding looming once again (due to a strained electricity grid) and with the broad-based economic and social benefits which could flow from a robust rooftop renewable energy market, it is difficult to comprehend why South Africa has yet to grasp the rooftop opportunity as much as her international counterparts. In Germany, for instance (a country with a far lesser solar resource) ordinary citizens now own half of the country’s renewable energy generation capacity.
Rooftop PV technology is mature and easy to deploy, far easier than building new coal-fired or nuclear power plants, and presents real opportunity for South Africa’s interconnected energy and socio-economic aspirations.
Yet onerous legal requirements in some instances, massive amounts of red tape and the lack of over-arching policy is holding us back. Add to that the reality where certain local authorities derive a disproportionate amount of their revenue from electricity sales – where such serves to cross subsidise other essential services – and we have a situation which acts as a disincentive to promote the self generation agenda. These are all obstacles which need to be urgently overcome.
Leading the Change
However, despite these hurdles, KJION Energy SA has started to install rooftop PV and are connecting these systems to the grid where legally possible. This practice not only improves the green credentials, but reduces energy costs and enhances the security of their supply. The payback time for a grid connected system at the current rate per kWh is now 5 to 7 years and if you can afford the up front investment, you’ll be generating electricity for free after that. Encouragingly, the major financial institutions are starting to look at innovative finance schemes in order to get over the initial upfront cost hurdle of installing the necessary equipment.
The Time to Go Green is Now!
ABOUT THE AUTHOR: Ralph M Ertner, born in 1965, is the founder and current CEO of the INTO SA Group. His career started at Deutsche Bank Berlin, where he was trained in and later responsible for asset and portfolio management. He went on to study law at the Free University of Berlin. After gaining experience at the law firms of Neuendorff & Partner (Berlin), Heussen Braun von Kessel (Munich) and Jan S De Villiers (Cape Town) as well as Van der Spuy (Cape Town) he decided in 1995 to stay in South Africa permanently. Two years later he obtained the degree of Master of Laws at the University of Cape Town (UCT). With his specialist knowledge in commercial law, financial and international tax matters, Ralph Ertner specialises in Immigration and Black Empowerment Law and contributes his energy and expertise to the benefit of INTO SA’s corporate clients in sub-Saharan Africa.
Ralph Ertner is author of eight books on legal investment conditions in South Africa, among them Tax Law: A Guideline for Investors and Investing in South Africa Opportunities and Risks in the 21st Century. Furthermore is he the author of several articles in the national and international media. He is a past member of the Regional Council of the South African German Chamber of Commerce in Cape Town and currently Director of the Austrian Business Chamber and the Spanish Chamber of Commerce in Johannesburg as well as the Founder and Past President of various Rotary Clubs.