Powering the country through the our abundance of sun has long been an environmental ideal. But the most common solar technology, photovoltaics (PV), costs a pretty penny. However, a significant new study found solar PV offers great potential to the country, but only if the government establishes the right policies.
Solar energy’s popularity has been growing steadily, with a 110% growth in solar PV in the market worldwide last year.
In South Africa, however, solar PV — at least as a source of power on the national grid — has not even cut its first tooth. It is not included in the government’s Renewable Energy Feed-In Tariff (Refit), which set the tariffs independent power producers will be paid for supplying electricity to the grid. At the moment the technologies that qualify for Refit only include wind, small-scale hydro, landfill gas and large-scale solar thermal power.
Sharp, one of the larger manufactures of solar PV, commissioned a study in South Africa to see what was necessary for the uptake of solar PV in South Africa. The study done by climate change and sustainable development consultants, Camco, found that mostly unfriendly policies and South Africa’s abundance of cheap electricity prevented the technology from flourishing.
Refit has received a lot of criticism for paying independent power producers too little to encourage them to invest in renewable energy, but when the regulator approved the Renewable Energy Feed-In Tariff (Refit) guidelines in April many stakeholders were more optimistic with the proposed tariffs.
With the more competitive feed-in tariffs and the expectation that solar PV will be included in the mix, the technology’s future looks rosier.
“We have been working with Nersa and are in discussions about solar PV,” said Jonathan Curren, director of Camco South Africa. “At this moment price is the key issue.”
Curren explained experience clearly shows that the most successful way to stimulate grid-connected solar PV markets is to create appropriate market mechanism and incentives, such as the feed-in tariff. “Feed-in tariffs have been demonstrated to be the most effective mechanism to stimulate the market for investment in renewable energy and for driving technology costs down in the longer term.”
Germany is the world leader in solar PV thanks to its “feed-in tariff” support. The feed-in tariff pays Âpeople who have solar panels installed above-market rates for selling power back to the grid.
Camco’s study revealed there was great potential for the technology in South Africa through a variety of different consumers. It also reviews some of the key opportunities and challenges related to solar PV and its possible integration into Refit.
One of its key findings is that a different approach will have to be followed for small-scale projects. At the moment any generator connected to the national electricity network is required to have a generation licence, but Curren says this will be a nightmare for South Africa’s energy regulator to handle if all of Johannesburg’s households had to apply for a licence.
“The transaction costs and bureaucracy would be excessive for developers and households installing small solar PV systems,” Curren said.
“It is also important to acknowledge that many small-scale projects may be established in municipal areas, connected either to low-voltage municipal electricity networks or Eskom Distribution, rather than connecting directly to Eskom Transmission at medium or high voltage. There is therefore a need to assess the key role of municipalities in supporting and implementing small-scale projects.”
The report found that the primary market for grid-connected solar PV in South Africa is expected to lie in the roof and building mounted solar PV systems, for both small and medium-scale installations. In addition, there are opportunities for integrating solar PV into low-cost housing, Curren said.