Question NW4182 to the Minister in The Presidency for Electricity
04 January 2024 - NW4182
Graham, Ms SJ to ask the Minister in The Presidency for Electricity
(1)What are the full details of incentives that have been put in place for private households to install rooftop solar photovoltaic (PV) systems to mitigate the demand for electricity and lessen load shedding; (2) Whether the incentives that are currently in place will be extended; if not, why not; if so, what are the relevant details; (3) whether he has been informed that certain municipalities are charging residents a fee (details furnished) where consumers are off the grid and using their own renewable energy; if not, what is the position in this regard; if so, (a) which other local municipalities and/or metros are following the strategy of charging consumers for being off the grid, (b) on what basis is the levy being charged and (c) what steps will he take to stop this as a disincentive to private households to be part of the rooftop solar PV programme?
Reply:
1. To encourage the uptake of rooftop solar photovoltaic (PV), the government eased private generator regulation giving customers more private generation energy options through across-network wheeling and on-site self-generation. This year, the government introduced further incentives like SARS tax rebates and National Treasury energy bounce loan guarantee programmes making Roof Top PV systems more affordable to households and small businesses. This is against the backdrop of customers seeking reliability during loadshedding, affordable electricity and climate change objectives.
To make rooftop PV more attractive, in the same way that Eskom does, many municipalities also offer grid services like net-billing (i.e. using PV surplus energy to offset billed consumption), and
wheeling (i.e., using the grid to transport generator production to customers). In addition, work is being done through the National Energy Crisis Committee (NECOM) on the development of a feed-in tariff (i.e., the utility buying customer surplus PV energy) which also encourages uptake. Eskom also has a standard offer programme in place where customers can sell excess energy to Eskom under a short-term power purchase agreement. Under the NECOM draft, frameworks were developed on net billing and wheeling to guide the industry with a standardised approach. These two draft frameworks are currently with the National Energy Regulator of South Africa (NERSA).
2. The National Treasury is the custodian of the incentive and have not expressed any indication of whether the scheme will be extended. There is however an ongoing discussion on the expansion of scheme (coverage as opposed to time-line), to the extent that it be expanded to include the battery and inverter which are the largest cost components of roof top solar solutions.
3. With regard to Municipalities the determination of tariffs and fees is a function of municipal budgeting, as provided for by the Municipal Finance Management Act, and as such the legislative competence of the respective Municipal Council, subject to due process. Under these circumstances whilst the fees may be a counter-incentive to upscaling rooftop solar/embedded generation, the Minister cannot “stop” legitimate fees imposed by Municipalities. There is also a question of municipal revenue loss (which impact the viability of Municipalities), in the context of self generation. These are broader consideration in respect of division of revenue across government, and must be addressed through the structures of Government in the context of the strategic approach to the energy distribution sector.
In respect of Eskom, only grid-tied solar PV solar systems on the Eskom networks require Eskom permission even if they are not exporting their surplus on the Eskom network. Such grid-tied customers will be liable for upfront costs for quotation, and connections (including bi-directional time-of-use meters where required). It should be noted, if a customer is off-grid, this means there is no connection and therefore no charges will be raised by Eskom. A customer that has grid-tied generation and uses the system as a backup must pay network fair charges for this backup.