Grid tied PV cheaper than municipal electricity?

My article that appears on page 16 of the November Energize Magazine.

Under certain conditions grid tie PV with reverse feed is equal to or cheaper than City of Cape Town electricity, three years ahead of schedule! Reverse feed is still "not legal" according to the City of Cape Town. How can we make it legal? The reason for this amazing state of affairs is because the price of City of Cape Town electricity for homeowners has doubled, whilst the cost of grid tied PV has halved.

A 1200 kWh house needs 8 kW to take it off the grid, but with energy efficiency, one can reduce this to 3 kW. This brings the renewable energy price down below R1,60 per kWh. In a year's time if the City of Cape Town increases prices by 25% to R1,60 per kWh and assuming PV doesn't reduce, we are at parity including borrowing from one's bond at 10% per annum. This price is R1,60 per kWh including VAT!! If PV reduces to R20 per watt as we are expecting, then the PV price per kWh will be less than the City of Cape Town price per kWh.

A grid tie system is one where all the output from the photovoltaic (PV) panels, which convert sunlight into electricity, is fed via grid tie inverters into the grid. This is called "reverse feed." A private homeowner in Cape Town using 1200 kWh per month pays R1,28 per kWh including VAT for a total of R1536 per month. If one can sell excess electricity at the same rate of R1,28 per kWh, this is called "Net metering." In a grid tie with net metering scenario, the grid is equivalent to a battery. In five average sun hours the house can make enough electricity for the day. When the sun is down the grid supplies the electricity.

If a house uses 1200 kWh per month, then per day this is 39,5 kWh. Divide 1200 kWh by five for average sun hours per day and we get to 8 kW. If we are in Upington, we can divide by 8,2 and get a 5 kW system. In London, England, the average sun hours is 2,4 which means that an 8 kW system produces 42% of an 8 kW PV system in South Africa.

Germany installs half of the world's PV panels. If they have to install twice as many panels as we need to for the same kWh production and they have been doing this for 20 years, then what is our problem? For the purposes of this discussion, I'm also assuming that we will need to install the full 8 kW whereas in practice, one could reduce electricity demand by as much as 70%, with energy efficiency meaning that only 3 kW of PV might be required. This could reduce the R320 000 system to R180 000. In many situations there might only be enough space for between 2 and 4 kW. The installation will reduce the homeowner's electricity bill whilst at the same time reducing demand on the grid. The economies of scale that selling the PV system at R23 or even R30 per watt would need a minimum order of 60 kW which is 12 x 5 kW houses or 8 x 8 kW houses. The reward for someone being prepared to be part of a group is a much better costing.

The next area to consider is interest rates and repayment times. Considering that the equipment will last for at least 20 years with only the inverter needing replacement in 12 to 15 years, we can borrow money over 20 years. An 8 kW system at R23 per watt is R161 000. Borrowing R161 000 at 7% over 20 years is R1278 per month. At R25 per watt we get to R1583 per month which is almost exactly the same as what the person is paying for their electricity.

So if my numbers are right, and if we can install for R25 per watt, and if we can use capital at 7% over 20 years, then we are already at "grid parity" for homeowners in the City of Cape Town. At 10%, and at R25 per watt, the monthly cost is R1970 for R200 000. In one year, R1536 becomes R1920, so in one year, we are at parity for homeowners who can take money out of their bonds to pay for their own electricity generation.

There are numerous countries which allow reverse feed, some with net metering and some with feed-in tariffs. Considering that our electricity in South Africa is so expensive, we don't need feed-in tariffs for homeowners. But we do need our government to allow people to reverse feed the grid and to take full advantage of the total electricity that their PV panels produces. The problem with a battery only solution or a solution which doesn't allow reverse feed is that the system might only be 30% efficient, thus pushing the cost of the system up per kWh.

Eskom say they can't rely on the grid tie inverter disconnecting from the grid if the grid is shut down and that an electrician working on the power lines might get electrocuted. This problem was resolved in 1999 with two international standards that all good grid tie inverters adhere to. So what are we waiting for? Ke Nako. The time is right for homeowners to take responsibility for the own electricity provision, especially that they can now make their own electricity cheaper than the municipality can provide it.

Job Creation in South Africa

David Lipschitz reply to "More formal jobs in Q3" on Engineering News.

The South African population is growing at 1% per annum, ie 500,000 new people every year. South Africa needs 42,000 new jobs per month just to keep up with population growth. 59,000 jobs in a quarter is 20,000 per month. Not enough. Also a lot of these jobs are government employment projects which are not sustainable. At some point the private sector cannot support an overextended government and the economy will crash. It's time for government to act on the incentives they have been proposing for the fastest growing sectors of the worldwide economy, namely IT (especially Smart Phones) and Renewable Energy (RE). Anything else will either create a bloated government or an economy in downward spiral. I should note however, that South Africa is a resource rich country, but it doesn't have enough electricity to extract and beneficiate these materials. The main restriction therefore on real growth in South Africa is the lack of electricity supply. An RE industry incentive, plus deregulation, plus enacting the "embedded energy" legislation would ease this burden and instead of the electricity industry losing 1000 people per quarter it could add 5,000 per month.

Article: Ten Commandments for Exotic Energy Inventors - PESWiki

Article: Ten Commandments for Exotic Energy Inventors - PESWiki

Renewable Energy News on 12th December 2011

Some interesting news today:

• Climate Talks End with Late Deal (COP17)
• 400 Million Euro Capital Fund and project in the Waterberg Region, North of Joburg
• Boeing Installs 2.6 MW Unisolar System on Boeing's Dreamliner Plant in South Carolina, USA
• IKEA is adding 10.7 MW to the roofs of its buildings which will make a total of 26.8 MW. Ikea owns its own RE systems.
• Mage Solar USA CEO, Joe Thomas, receives award from Georgia Solar Energy Association.

The South African Board of Directors (Government Cabinet) Party at the expense of their employees (taxpayers)

The Cape Times article on 23rd November about the size of government jets refers.

The difference between a country like South Africa and China is that China pays cash for its jets, whereas South Africa borrows the money.  Or actually government ministers borrow the money and expect their tax payers to pay the bill!

According to the South African Revenue Services Report, Chapter 6, South African Government Net Debt is expected to rise from R478.4 billion in 2006/7 to R1.3 trillion in 2012/13 whilst the South African cabinet continues to approve the borrowing of 6% of its expenses year after year.  Debt service costs are expected to increase to R104 billion per annum, but this is interest only and who is receiving these interest payments?  And how will the capital be repaid?

What I'd like to know is: Are South African government ministers signing personal surety for this debt?  Or who really owes the money?

A business which borrows this amount of money to sustain itself should not be allowed luxuries such as private jets, should only be allowed to fly economy class, should use video conferencing where-ever possible, should not be allowed to buy new cars with a value more than R150,000 and should not be allowed to buy new cars more than once every 10 years or 200,000 km which ever happens first, should have their holidays curtailed and salaries cut.

Any government expenditure that is for the government's own benefit and not for the people's benefit should be subject to a referendum.  And citizens should be allowed a say in where they get their electricity, water, food, transport and other major capital expenditure items from.  The South African cabinet is notoriously bad at budgetting for large capital projects often overspending billions on construction projects and costing the tax payer dearly, not only in terms of increased taxation, but in the inability of business to perform because of the late delivery of projects.  It's time for the government's party to end and for them to start performing in their jobs.  Once their Debts are paid, they can buy new cars and jets.

Powering Africa What If Questions for the South African Government

What would the cost of Coal, Hydro, Nuclear, energy be if all subsidies were removed? Would Nuclear be viable, considering that governments underwrite nuclear accidents?

What if the 2% electricity levy was used for Renewable Energy (RE) rebates?  As far as I know there is already over R15 billion in this fund. R5 billion per year being collected. What if R1 billion per annum was awarded to Universities for Renewable Energy research? The government spent R1 billion per annum on the Nuclear Energy Pebble Bed Modular Reactor (PBMR) for 10 years!

What if private people could make investments before VAT and before tax, in a similar way to companies? What would this cost the fiscus? How many jobs would be created?

What if climate and carbon taxes were used to support RE investments, especially those that supply energy at peak time?

What if everyone was given the opportunity for Time of Use (TOU) tariffs without the service fee? Assuming that people pay to install their own meters.

What if "reverse feed" was legal?

What if Net Metering was introduced with sell back at 30% less than buy at off peak times and sell back is 100% more than buy at peak times, thus incentivising people to create systems that allow them to sell at peak times? At the moment the household tariff for someone using 1,200 kwh per month is R1.29 per kwh incl VAT. This makes R1,548 per month. Sell Back during off peak time could be 90.3c per kwh. Sell Back at peak time could be R2.58. Sound like a lot? Far fetched? Eskom currently spends somewhere between R4.00 and R45.00 per kwh at peak time for energy depending on who you speak to. I calculated that the Ankerlig power station costs R11 per kwh to run using 25,000 litres of diesel per minute to make 1,350 MW or 1.35 GW. Actually, only 8 turbines run at a time in a maximum configuration, ie 1200 MW, saving 1 stage of load shedding.

What if Retail Wheeling was introduced? e.g. people with large roof tops selling into the grid to buyers who want to buy green energy? Solar Farms is another model that would benefit from Retail Wheeling.

What if the National Grid was given to an NGO (SESSA?) to run?

Local Solar Water Heater Companies going out of business

Local Solar Water Heater Companies going out of business.

The problem is that the South African government (Eskom, DOE, etc) keep introducing new tactics in their long term Energy strategy formulated in 2003. My own company invested over R2m in the Feed In Tariff process which isn't happening. We don't actually need a FIT in South Africa because electricity prices are going up so fast, but what we do need is Reverse Feed to be legalised and we need Net Metering to be introduced. The City of Cape Town had Net Metering in their draft tariffs, but not in their final tariffs for this year. So as the government vacillates constantly, it is telling investors it doesn't want us, and is sending the wrong signals. How to fix this?