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Monday, December 23, 2013

When do we get to grid parity

This graph for home owners in the City of Cape Town, using updated information from the IRP, eg 8% increases till 2015, then 16% increases (pages 20,21). We got to grid parity in July 2012. This is the point that a home owner can produce electricity with PV (photovoltaic) panels, using net metering, at the same price or cheaper than they can buy it. Net Metering means buying and selling electricity at the same price.


  1. the problem here in SA is that the municipality will buy at there selling rate. they have a 30% variance in there favour.

    1. This isn't a serious problem. The bigger problems are:
      1) The service fee.
      2) No PPA (power purchase agreement). Cape Town City has had Net Metering for 2 years and not one person has got through the hurdles.
      3) In South Africa: 15 laws, 10 standards and 1 document, just to Parallel Feed The Grid, ie before one even gets to Net Metering.
      4) In the USA: 2 laws, 3 standards, 1 document, for full Net Metering and Feed In Tariffs.

  2. Getting to Grid Parity. A reply to someone on LinkedIn, who said that we will "never" get to grid parity with batteries, and who also asked, if we are at grid parity, why isn't our utility telling us?

    Hi Hugh.

    "Never" is a very long time. There are new battery technologies which could revolutionise their pricing and as Germany moves to provide Feed In Tariffs for battery technologies, I think this revolution will happen faster than we think. For example PV with Net Metering has moved from US$1.20 per kWh in 1991 to 12c per kWh now. And inverter technology today is far more sophisticated than it was 20 years ago and much cheaper per Watt.

    Thank you for your comments. I have already installed a number off on grid, and off grid systems, so have the calculations you have done. And at our sites in the Karoo, for example, we have multiple inverters, eg 3 x 1.6 KW inverters. If one breaks the other two work. It takes 6 hours to drive there, so not easy to get to.

    We are definitely at Grid Parity with Net Metering (without batteries) for homeowners in the major cities in South Africa. In fact, if we were allowed to install systems we could save 28% from day one!

    Our problem is purely a social one, not a technological or financial one. PV and Inverter systems are based on ICT (Information and Computer Technology). Moore's Law applies to some extent in PV systems.

    And yes, the South African utility and government are starting to install their own systems, but they don't want their clients and taxpayers to save any money, hence not a level playing field.

    We have a monopoly in South Africa, and Eskom behaves like a Monopoly! They want centralised, large scale systems, like the two 4.8 GW Coal Powered Power Stations at Kusile and Medupi which are already 18 months behind schedule, are plagued by massive problems, and are 58% over budget. For every R1 billion (approx US$100 million) that is wasted, 5,000 Middle Class South African houses can be made into power stations and never have another electricity price increase again. In fact my models show that people can get 5% decreases in prices per annum until they save 50% of their current price.

    So for the money wasted at Kusile and Medupi, 460,000 middle class houses could now be "grid friendly". If you add this "waste factor" to your models, you will find that we are at grid parity even at the power station pricing level.

    At some point homeowners will be at grid parity with batteries. And there are clever layouts which I am designing which mean that this point will happen sooner than we think.

    Utilities must get their act together to work with homeowners before homeowners get to grid parity with batteries. If they don't then people will simply disconnect from the grid. If the utilities do work with us, then we will find that we can grow our economies a lot quicker and we can work together to solve our immense problems.

    Note that the average price that a "poor African" without grid electricity pays for electricity is about R4.50 (US 45c) per kWh. They use generators, and if one factors in the time they spend looking for wood and carrying water, the cost is actually much higher! So one can install combined PV, Battery, and Generator technology and bring this price down.


  3. Note that the 1200 kWh is per month.