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Mass rollout of private PV systems must exclude punitiv...

Defend Truth

Opinionista

O solar mio — mass rollout of private PV systems must be done without punitive Eskom charges

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Professor Dr Omphemetse S Sibanda is a Professor of Law and the Executive Dean of the Faculty of Management and Law at the University of Limpopo. He holds a Doctor of Laws (in International Economic Law) from North West University, a Master of Laws from Georgetown University Law Centre, US; and an LLB (Hon) and B Juris from the then Vista University, Soweto Campus.

On-grid solar installation fees payable to Eskom must not be another bedrock for corruption and siphoning money from already hard-done-by consumers.

“After more than a decade without a reliable electricity supply, South Africans are justifiably frustrated and angry. They are fed up.”

I am glad that President Cyril Ramaphosa said it without sugar-coating his words when addressing the nation on 25 July 2022 on some of the actions considered to address the electricity crisis. One thing, though, is that it is not only during the past three weeks that the country has experienced severe rolling blackouts that have “disrupted all of our lives and caused immense damage to our economy.” 

“Rolling blackouts” have become synonymous with poor electricity generation management in South Africa, and an inconvenience to millions of households and businesses. When it comes to electricity generation in South Africa one reality stands out: load shedding or rolling blackouts or power cuts or power breaks, whatever you want to call it, remain inevitable until Eskom can secure a more sustainable power generation capacity.

In his address, the president pointed to the government’s intention “to enable businesses and households to invest in rooftop solar”. Unfortunately, the government’s complacency with regard to addressing Eskom’s ailments took it so long to understand that the future of our electricity generation lies on our rooftops.

Solar photovoltaic (PV) systems, whether grid-connected (on-grid) or off-grid systems, are some of the suitable energy generation systems to meet the increasing energy consumption and mitigate the impact of depletion of traditional energy resources. The European Commission (EC), for instance, is proposing a solar rooftop requirement for commercial and public buildings from 2027, and new residential buildings from 2029.

“I know this is ambitious, but it is realistic, we can do it,” said European Commission President Ursula von der Leyen.  “We foresee up to 1.1 million solar jobs in Europe by 2030, and the EU Solar Skills Partnership will help deliver the workers on the ground”, added Dries Acke, policy director at SolarPower Europe.

Notable is that the EC plan, the REPowerEU Plan, is, in essence, responding to the global energy market disruption caused by Russia’s invasion of Ukraine and taking pre-emptive action against heightened energy security concerns.

In about 10 years down the line when the EC is moving in a different clean energy direction, South Africa will be crawling to take advantage of solar energy and be millions of kilometres behind developments in the energy sector. Eskom will send South Africa to the back of the line concerning solar energy developments in Africa while countries such as Uganda are growing in alternative energy prowess with its schemes, such as the Global Energy Transfer Feed (GET FiT) programme inaugurated in 2013.

According to the 2020 GET FiT annual report “the main objective of the GET FiT programme is to assist Uganda in pursuing a climate resilient low-carbon development path resulting in growth, poverty reduction and climate change mitigation by facilitating private sector involvement and improving the framework conditions for private investments in renewable energy.”

I would have said too little too late, but President Cyril Ramaphosa encouraging households and businesses to switch to solar energy is a welcome relief. An en masse switch to solar energy is possible.

The Mall of Africa, for example, has the largest rooftop solar PV system in the southern hemisphere. A 180ha pecan nut orchard in Hartswater has the largest off-grid low-voltage solar farm. Eskom itself is reported to have access to more than 2,700MW of solar capacity from private power producers that feed electricity into the national grid and it buys electricity from private wind farms to feed a maximum of just over 3,000MW into the national grid.

Ramaphosa said in his address that “to incentivise greater uptake of rooftop solar, Eskom will develop rules and a pricing structure — known as a feed-in tariff — for all commercial and residential installations on its network.”

Did Eskom jump the gun or put the horse before the cart when last week it reportedly announced a new proposed tariff structure that included an additional R720 payment by those who invested in solar energy while remaining on the grid? The nation was justifiably infuriated and fed up with Eskom because the proposed fee structure as announced was devoid of details and proper context.

If anything, the announcement painted Eskom as a power utility determined to hang on desperately to its historical monopoly on energy generation in South Africa and fearing the challenge of solar energy generation alternatives. One hopes that Nersa and our courts can come to the rescue of solar households should Eskom start to charge them more for their electricity as this is pure price discrimination.

In 2020, for example, the Kansas Supreme Court came to the solar energy users’ rescue with its ruling that power utilities cannot charge customers who generate their own power more than customers who do not. This is after the Kansas Corporation Commission (KCC) in 2018 approved extra fees (“demand charges”) on residential solar customers. According to the court, this was a discriminatory rate in violation of Kansas law.

I am reminded, from a human rights point of view, of the fact that Eskom continues to get away with murder, not respecting individual rights to electricity as discussed by the Constitutional Court in the 2009 Constitutional Court case of Joseph and Others v City of Johannesburg and Others.

The apex court considered the question of whether individuals have a right to receive electricity after City Power disconnected electricity to a block of flats, Ennerdale Mansions, because the landlord was in arrears with payments to City Power. The court ruled that “the termination of electricity supply to Ennerdale Mansions on 8 July 2008 is declared to be unlawful” and “the respondents are ordered to reconnect the electricity supply to Ennerdale Mansions forthwith.”

If the country is to go full steam ahead with rooftop solar energy, any proposed rules and a pricing structure for all commercial and residential on-grid solar installations must take into account fair and equitable treatment standards (FET).

One is not arguing for Eskom to excuse free riders (individuals who impose costs on the system without providing benefits such as payment) and households who are completely off the grid but using the utility to charge their solar batteries. However, they must be charged for their actual grid power use and not through some thumb-sucked rate. It is discriminatory and punitive if Eskom primarily uses households and businesses’ solar energy status as the basis for charging more for services than it charges for non-solar users.

Back to plans to roll out solar energy in South Africa: while the president’s address is a welcome relief, the proof of the pudding is in the eating. So many times in this country we have received enticing promises but delivery has not always materialised.  The perennial rolling blackout problem should have spurred any right-thinking and zero-corruption-tolerance power utility to support switching to solar energy as part of the energy supply diversification strategy.

The United States under its National Energy Law, for example, does implement incentives for renewables with tax exemptions provided for household consumption points that turn to PV systems.

The transformation of South Africa’s energy system has for some time not been a top priority for the struggling utility, even when it has been in the intensive care unit for years. It would seem like nobody at Eskom had the foresight that rooftop solar energy, in the long run, will mitigate the rise in energy prices for already economically downtrodden households.

Solar energy is also about grid energy savings and addressing the current electricity crisis, and reducing bills for consumers. Unfortunately, Eskom may have been too busy allowing itself to be captured and dabbling in corrupt practices when the world was planning its future in the sun.

This comment may sound harsh, but it is common knowledge that Eskom finds itself in its current financial predicament because of, among other things, embezzlement of public funds, corruption, irregular contracts, fraud, theft and sabotage, wasteful expenditure, poor management and inadequate planning in the past.

For instance, the construction costs of the multibillion-rand Kusile Power Station in Mpumalanga ballooned from the initial estimated cost of R78-billion to R161-billion. The Zondo report noted that Eskom entered into irregular contracts worth R14.7-billion, most of which were with companies linked to members of the Gupta family.

“The evidence proves a scheme by the Guptas to capture Eskom, install the Guptas’ selected officials in strategic positions within Eskom as members of the board, the committees of the board and the executives and then divert Eskom’s assets to the Guptas’ financial advantage,” said Chief Justice Raymond Zondo in the report.

In January 2020, President Ramaphosa during a Q&A session in Parliament said that “Eskom and Transnet have recovered more than R2.3-billion in monies lost to corruption.”

On-grid solar installation fees payable to Eskom must not be another bedrock for corruption and siphoning money from the already hard-done-by consumers. Hopefully, looking back 10 years from now we will be saying that since 2022, South Africa has seen thousands of solar panels popping up over household rooftops across the country as an increasing number of South Africans switch to solar energy.

It is incumbent on the government to ensure that going solar is affordable and that the cost of going solar is manageable for every household. Any rollout for solar energy to households must be a comprehensive plan that also addresses related issues such as informal settlements because you need a decent house with a rooftop, a solid structure, to install a solar system and security for the system.

South Africa still has a growing number of informal settlements indicative of the country’s growing housing crisis, with unemployment challenges. Many South Africans living in informal settlements will not benefit from the solar boom owing to the high costs of installing solar if not financed or subsidised.

Admittedly, the introduction of solar mini-grids, such as those introduced in the informal settlements in Philippi in Cape Town may be helpful to produce some cheaper energy. But a long-term results approach is needed.

For example, the US provides different financial options for consumers which can be considered in South Africa. In addition to a purchased solar system, a solar system can be installed through measures such as a solar loan, lease, or power purchase agreement (PPA). Solar leases and PPAs are interesting as they allow consumers to host solar energy systems that are owned by solar companies and purchase back the electricity generated. 

The banking sector can also assist in putting solar panels on rooftops by introducing a mortgage system that allows new homeowners to add solar installation as part of their mortgage loans.

One sector that will need closer monitoring is the homeowners’ associations (HOA) and their strict rules. There are reports that some HOAs object to homeowners installing solar panels. To make solar installation possible for homeowners living under HOAs, the strict rules of HOAs that may be a hindrance to installing solar panels may have to be changed. 

The Supreme Court of North Carolina, for example, ruled that homeowners in HOA communities can install solar panels on the front of their homes. The HOA in question had refused the homeowner permission to install the panels on the front or side of his home, which is where most sunlight to power the panels was accessible.

Similar rulings are now seen across the United States. Indiana in March 2022 went a step further by passing legislation (House Bill 1196), which makes it difficult for HOAs to prohibit residents from installing solar panels. According to this legislation, a homeowner can petition other HOA members for approval to install a solar energy system on his or her dwelling unit or property.

California law in 1978 enacted the Solar Rights Act, which limits the ability of covenants, conditions, and restrictions enforced by HOAs and local governments to restrict solar installations. Going solar as a country cannot be business as usual.

A lot of changes will have to be made. To borrow from the Kansas City Supreme Court, South Africa must design “a sound economic model of electricity generation and delivery, on the one hand, and promoting a policy of responsible energy production and use, on the other”. DM

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  • Absolutely! Rooftop solar could quite quickly and at least cost start helping address the energy generation shortages ESKOM has encumbered us with. But, of course, it would start taking control, and opportunity from corruption from those who have long benefitted from it. (If Ramaphosa is serious about beginning to address the problems, of course he would long ago have rid us of Minister Gwede Mantashe who remains the primary obstacle to a renewable future.) As roof-top solar expands, we will start experiencing the problems of the ‘duck curve’ of excess production during the sunshine hours and a deficit in the hours of dark, but there are many ways to deal with that also. It should also be obvious it’s in everyone’s interest to keeping roof-top solar connected to the grid and commence the transition to the renewable smart grid. Not only to keep the lights on, but also to commence effective climate action by reducing reliance on fossil fuels.
    Bangladesh has been an example demonstrating how mini-grids can work very efficiently even in the poorest of areas with panels on shack roofs, with an inverter and battery in the home, connected in a mini-grid. But this will require institutional support at this stage in ZA. This is illustrated in an exciting way in the film 2040.

    • When ESKOM has been the trough at which many cadres have been feeding with unfettered frenzy, it is difficult for a ruling party to get its snout out the trough … and allow rational approaches such as the prof. propounds, to lead the way.

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