Solar and renewable energy companies have now had a chance to evaluate the immense number of quotations and requests for proposals received from business and individuals during the last round of load-shedding by Eskom. At the time Eskom was the best salesman ever for the renewable energy industry.
Frankly – load-shedding was not that good for business or for the sustainability of the renewable energy industry.
Reason – the knee jerk panic reaction by consumers new to the solar industry saw them making rash decisions to install Solar Grid Tie Hybrid systems at exorbitant cost.
In a normal environment consumers make decisions based on long term sustainability and return on investment over many years. Hybrid systems include batteries which are a finite resource, add greatly to the cost and negatively affect the amount of PV Power available to pump back into the grid to reduce the amount of power consumed from Eskom.
In some cases the price differential between a Hybrid and a Grid Tie ONLY system was in the region of 60%.
Add the fact that municipalities have implemented OR are considering implementing an availability charge to consumers that use the grid as a ‘battery’ at night and the expensive hybrid option just got more expensive.
During the load-shedding madness we lost sight of the main focus of Grid Tie PV which was to generate as close as possible to (and exceed) the amount of electricity consumed at each installation. According to Straton Solar; “Consumers fortunate enough to live within the Nelson Mandela Bay Municipality enjoy Grid Tie on a one-for-one basis and if they over generate have the option to sell that excess power on as well. This makes for a ‘perfect storm’ for the solar industry in Port Elizabeth and surrounds.”
A well designed Grid Tie ONLY system with extended guarantees, online monitoring and all the necessary certificates currently costs around R22 000.00 per Kw. A 5Kw system will zero an electricity bill of around R900.00 per month and lock the consumer in at set price per unit for at least the next 20 years. If there are NO electricity price increases then the payback time will be 10 years. BUT, with a conservative 8% price increase on the electricity price from Eskom per year then the payback time on a Grid Tie ONLY system drops to 6 years for the private consumer.
With the Section 12B Tax Allowance for depreciation on renewable installations currently at an allowance of 50%, 30% and 20% over three years savvy businesses are seeing their return on investment kick in at less than two years. In 2016 this depreciation allowance will be increased to a 100% write off against taxable income for the first year.
Some businesses have opted for a two phase approach to the use of renewals by installing a small hybrid system to replace generators that used to run essential equipment and then installing large Grid Tie ONLY systems to rapidly reduce their reliance on the grid and arrest their monthly electricity bill.
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