Solar energy to become cheaper than Eskom electricity in South Africa

While solar energy was currently cheaper than energy derived from diesel plants and generators that were often used as a substitute to conventional coal-fired power, it remained more expensive than coal-fired electricity generation.
“This scenario is set to change,” said energy management consultancy firm PPA Energy South Africa executive director Graeme Chown.

He noted that solar panel prices in South Africa were decreasing at around 10% a year and predicted that it would take between three and five years for solar electricity to become cheaper than coal-fired electricity, should Eskom be granted its requested 16%-a-year tariff hike for the next five years.

Pretoria-based solar electricity development firm Subsolar Energy owner and MD Dick Berlijn added that medium-sized businesses with high-energy needs were most vulnerable to price increases and the proposed tariff escalations.

“These businesses would, in particular, benefit from solar systems, owing to lower energy demand than larger businesses,” he said.

During the public hearings on Eskom’s tariff hike application in January, the National Union of Metalworkers (NUM) said that 37.5% of energy-intensive companies in South Africa would, in due course, have to close down if the tariff increases were granted.

Berlijn said that, while the NUM had primarily referred to heavy industry and mining, other segments of the economy would also be hard hit.

Chown believed that solar energy could help South African companies overcome the financial implications of future electricity price hikes should the solar energy industry market the energy technology as a practical solution.

Brand expert Andrew Rice added that, while it was true that the South African private sector was increasingly viewing solar as a viable solution, perceptions were lagging behind the capabilities of the technology.

He noted that the marketing of solar energy should not revolve around the ‘green’ element of its power-generation capability, but rather around its practicalities.

“It is time for solar to be seen as a practical solution and it is up to the industry to market solar as such, so that people start to see it as a necessity,” Rice said.

The Solar Future South Africa conference, to be held at the Cape Town International Convention Centre on February 12, was set to address the issue of solar marketability, along with several other key themes.

The event further aimed to provide insight into South Africa’s solar-power generation capacity, the impact of global solar developments on the cost of solar energy, the position of solar in Eskom’s future energy mix and the intricacies involved in the development of solar photovoltaic (PV) plants.

Besides Chown, Rice and Berlijn, the speaker line-up for the conference included Eskom electricity planning and market development GM Callie Fabricius, international solar PV expert Jigar Shah, investment banker Bhavtik Vallabhjee and the National Treasury’s Karen Breytenbach, as well as various representatives from the Department of Energy and global energy contractors and developers.

Source: Engineering News (By Natalie Greve)

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