Short-sighted approach to renewable energy stifles growth potential

Short-sighted approach to renewable energy stifles growth potential

By Jack Ward, MD of Powermode

The decision by the South African government, through the National Energy Regulator of South Africa (NERSA), to shift the responsibility for small-scale embedded electricity generation to municipal authorities effectively stifles the growth potential of rooftop solar photovoltaic (PV) systems in the country.

Due to their concerns about revenue loss there is little hope of the often financially crippled municipalities offering any incentive to home owners and small businesses to install these systems.

It is no secret that electricity is the ‘cash cow’ for many municipalities who use revenues to cross-subsidise other sources of income – particularly in poorer areas.

Unfortunately, these municipalities - many of which are also experiencing administrative difficulties - are unable to see ‘the bigger picture’ when it comes to renewable power generation.

They are unable to see that by encouraging the installation of grid-tied solar PV systems in their jurisdictions, through a Feed in Tariff (FIT) or other rebate incentives, they will be instrumental in helping to generate many thousands of megawatts of new, clean power and so assist Eskom in its quest to ‘keep the lights on’ in SA.

They are unable to see that by encouraging small-scale solar PV adoption, they will become catalysts, helping to create thousands of new jobs, establish many new small businesses and upskill hundreds of technicians on a long-term, sustainable basis.

This short-sighted approach by municipalities, together with NERSA’s inadequacies, puts SA’s renewable power generation problems in the hands of a few large corporations acknowledged and licensed according to the dictates of the current Renewable Energy Independent Power Producer Procurement Programme (REIPPPP).

While the large, utility-scale power generation projects that will be established in line with the programme are undoubtedly necessary, they have not been designed to be supportive of local industry and the job creation potential of an army of new, small businesses – as would be the case with rooftop solar PV initiatives.

Unfortunately, it appears as if a significant slice of the profits from the REIPPPP supported projects will be pumped to overseas investors instead of benefitting SA’s GDP figures.

I believe there could be an immediate market for as many as 100,000 new rooftop solar PV installations in SA. Sales of this many systems could well help create as many as 1000 new small-scale businesses and many thousands of new jobs in the near term.

Perhaps NERSA should take a small percentage of the many millions of rand it is throwing at the REIPPPP and use it to create a subsidy – if not a FIT – to motivate users to install solar PV systems and thus kick-start an exciting new industry with enormous potential.

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