Government should buy back electricity from solar users

The government’s reluctance to buy back electricity that solar users feed into the grid is a big missed opportunity according to Chris Yelland, energy analyst and managing director of EE Business Intelligence.

“I think the government should introduce a country-wide, national feed-in tariff for all municipalities and they should just be forced to do it,” he said.

Municipalities have been speaking about doing this for years, but nothing has been done other than in Cape Town and a few other areas.

Buying electricity back from solar panel owners who feed power back onto the grid would create an incentive that “will bring significant extra capacity to the grid”.

“It changes the business case somewhat if you can get paid for surplus. People will install more panels,” he said. 

He said that this policy could be forced on authorities as promulgation under the national state of disaster.

President Cyril Ramaphosa declared the energy crisis a national state of disaster in terms of the Disaster Management Act at the state of the nation address in February. It is intended to free up resources to reduce load-shedding.

Self-generation

Yelland said that the incentives that the government has introduced to encourage self-generation could encourage the implementation of the feed-in tariff. 

Yelland thinks that the solar tax incentive that is in place for businesses is strong. 

Businesses will receive 125% of the value of the panels, batteries, inverter, and installation costs required to acquire a solar system back as a tax break. This incentive will be in place for 2 years.

He thinks that the solar incentive for individuals falls short of what would be required to dramatically change behaviour.

The 25% rebate for individuals only applies to panels and is capped to a maximum benefit of R15,000 per individual. The scheme will be in place for one year.

Yelland said that it is too early to determine the effect that the incentives will have this early.