In line with the mayor’s request, finance minister Enoch Godongwana has granted Cape Town an exemption from provisions of the Preferential Procurement Policy Framework Act that require a competitive tender process for all contracts above a certain value. This means the city can (and will) start buying electricity from anyone willing to sell it, including residents and businesses with solar installations on their roofs.
The fact that electricity can now be sold on to municipalities is big news because it makes investing in solar more financially viable. The private sector is already coming up with a range of innovative financing models to make it even more accessible to households, especially those who don’t live in the Cape.
The factor deterring most middle-class South Africans from investing in solar panels up to now has been their cost. Going “off-grid” costs most households between R150,000 and R300,000.
Godongwana’s announcement of a 25% rebate for installation costs up to R15,000 lowers this cost, though the relatively small cap may not be enough to make solar affordable for most SA households. However, the second bit of good news is that the Treasury is finally recognising that the economic benefits of households generating electricity justifies a cost to the fiscus.
If successful in aiding the country’s security of power supply, rebates may continue and even increase over time. On the other hand, the 125% rebate now on offer to businesses — without a threshold — is a significant immediate step. It will (directly) offer improved energy security to those driving the economy, as well as (indirectly) making every South African more energy secure, especially those living in municipalities (such as Cape Town) that plan to buy energy from residents producing an excess.
These are all steps in the right direction, and we can all only hope they will gather momentum. The good news is we don’t have to walk very far. Just a few steps up a ladder lands us right on the answer to SA’s energy crisis.
Ahren Posthumus
Momint CEO and national spokesperson, SunCash Initiative
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