EDITORIAL: Wanted, incentives for supporting off-grid initiatives
The government should offer financial inducements, rebates, and tax credits to encourage more homeowners to take up solar energy systems
There is a multitude of reasons one might want to defect from the national power grid. For environmentally conscious consumers, there is a growing social imperative to rightly move away from polluting coal-fired power, which governments and industries worldwide are coming under pressure to do to reduce the risks of climate change.
Sadly, in SA more specifically, there is additional motivation. The monopoly power utility, Eskom, is simply unable to meet the country’s power needs as maladministration and corruption have gutted the institution. While hard at work to get back on its feet, Eskom has warned the public to expect at least another 18 months of load-shedding at the same time that electricity prices continue to rise.
The effect of the power supply crisis on the country can be seen in the disappointing GDP numbers. SA recorded negative growth in the final quarter of 2019 — its second technical recession in two years. Evidently, the motivation to reduce reliance on SA’s power grid is clear. So what’s the hold-up?
When it comes to industry, where there is an obvious economic imperative and a great deal of pent-up demand, the obstacles have been well documented. For businesses wishing to produce more than 1MW of their own power — enough for 650 average homes — this entails a drawn-out licensing process, though the government has promised to cut the red tape to free up independent power supply.
While much has been said about the business imperative to reduce reliance on the grid, less is known about the options for households, which have also been hit by power cuts and rising electricity costs.
In a three-part series published this week, Business Day looks into the solutions available for SA households to reduce their reliance on the national grid — and what is preventing their uptake. Homeowners wishing to reduce their reliance on the grid have it easier in terms of regulation — they are not looking to produce all that much and only have to register their systems.
On the technology options, the prices of solar panels have come down, while batteries are now more affordable. A simple grid-tied system is an affordable offer, but what some consumers don’t realise is that they will be cut out in the event of load-shedding.
But being off-grid — once better associated with rural areas and far-flung hippie communes — seems these days more the purview of the rich. For a system that takes a medium-sized home almost entirely off the grid, a homeowner can expect to fork out about R200,000. That’s not exactly the sort of investment an individual makes at a time when confidence in SA remains shaken, the economy is depressed and — anecdotally at least — a great many of SA’s wealthier citizens are moving abroad.
Governments in many other parts of the world offer financial incentives, rebates, and tax credits to encourage more homeowners to take up solar energy systems. It’s this type of incentive that the Cyril Ramaphosa government should consider offering if the broader goal is to ease power demand from the national grid and bolster its climate-friendly credentials.
There is a glaring gap in the market for innovative and affordable financing for off-grid systems in SA homes. There are other options apart from funding an installation through a personal loan or extending one’s bond. As the cost of solar solutions rapidly comes down, industry experts say the simple economics of installing a home system ought to be incentive enough.
According to industry estimates, about 100,000 households have installed some sort of solar system over the past two years. But that is a mere drop in the ocean of an estimated 14.5-million households in SA. The sad reality might just be that South Africans — so overwhelmed by poverty, inequality and unemployment — are just not as sustainability-minded as we like to think we are.
For real change to take root, we shall have to start thinking about the long term more seriously and the government will have to lend a supportive hand to those with the financial means to reduce their households’ carbon footprint.