LETTER: Switching to solar makes sense even when Eskom keeps the lights on

The existential threat posed to businesses by load-shedding appears to have passed, for the foreseeable future at least, but solar energy still offers a compelling business case to commercial and private energy users.

Recent data has indicated a slowdown in the adoption of rooftop solar as SA’s embattled power utility stabilises its grid and improves the energy availability factor. According to news reports, only 350.6MW of rooftop solar capacity was added in April, May and June 2024, compared to almost 1,170MW during the same period in 2023.

It’s clear that SA’s solar energy market has reached a new phase in its development, with load-shedding no longer the primary driver of rooftop solar adoption among SA businesses. Instead, investments in solar energy are increasingly driven by economic factors, especially as businesses seek to protect themselves against rising electricity prices.

As a result of reduced load-shedding, the business case for battery energy storage solutions has diminished. Despite this there are a growing number of municipalities with high peak time-of-use electricity tariffs. Businesses operating in these municipalities could justify an investment in battery storage for energy arbitrage use cases, that is: to store excess solar photovoltaic (PV) generated during low tariff periods for use during peak tariff periods.

Eskom recently announced that it would apply to the National Energy Regulator of SA (Nersa) for an increase in electricity tariffs of up to 44% for 2025. This follows a tariff hike of 18.65% in 2024.

The sharp increases in electricity costs coupled with broader inflationary pressures are driving interest among commercial customers, especially in light of the falling costs of solar equipment and the uptake of wheeled energy solutions, facilitated through the recent signing into law of the Electricity Regulation Amendment Bill.

Solar energy investments empower businesses to gain control over some of their energy costs while freeing them from negative effects caused by instability in the public sector.

At the time of writing, SA had enjoyed about 150 days without load-shedding, which may have played a strong role in the slowdown in residential solar adoption over the past few months.

A study conducted by local environmental scientists found that typical barriers to rooftop solar adoption among private households included high upfront costs, a lack of knowledge or understanding of solar, and a lack of support or incentives by municipalities, which make money from selling Eskom’s mostly coal-generated power.

Grant Berndsen
CEO, Terra Firma

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