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Time is ripe for large-scale solar photovoltaic

6th December 2013

By: Saliem Fakir

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While the cost of electricity steadily rises and the demand for energy increases, South Africa, a country boasting abundant sunlight, continues to dig deep for high-quality coal to power the nation. Many households and businesses have begun turning to solar power to supplement their energy needs but, until recently, the technology remained too expensive for solar to be rolled out en masse.

As more countries develop the technology for solar power, the price for these systems has dropped, and, in some cases, it is now competi- tive with new-build coal.

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There are now enough stakeholders in the solar power industry to make it a viable source of energy in the country, making it as competi- tive as residential grids or sourcing more coal (especially given the cost of building new coal-fired stations to meet the energy demand). But, for solar power to become part of the country’s energy offering, there are systemic barriers that must be overcome.

WWF-SA, in collaboration with the South African Photovoltaic Industry Association (Sapvia) and the Department of Trade and Industry (DTI), recently released a research study on the localisation potential of solar photovoltaic (PV) and the strategy needed to support a large-scale roll-out in South Africa. The study demonstrates that the greatest challenges of any major roll-out are institutional rather than technological.

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Solar PV is not the same technology that is widely used to directly heat water for domestic geysers. PV refers to ‘photovoltaics’, which takes energy from sunlight and converts it into electricity, either for smaller-scale residential and commercial use or, through an array of panels, for the utility-scale generation of power that is fed into the national grid.
To reach grid parity, the South African government will have to support the development and widespread adoption of solar technologies through incentives. One notion is to follow the example of countries like Germany, where those who use solar technology can then sell any surplus energy back to the grid. Significant progress has already been made at municipal level locally – for example, in the City of Cape Town, where a buy-back tariff has been intro- duced for small-scale energy generation.

The institutional barrier comes in, however, when municipalities realise that ‘net metering’, as this incentive is called, has the potential to reduce the revenue they generate from rates and taxes. This, of course, must be weighed against the bigger picture, for the country as a whole, and the potential benefit that solar technologies will bring about, such as increased employment, greater energy security and reduced carbon emissions.

Net metering also makes solar power a financially viable option for households and businesses. By supporting the widespread adoption of solar technology through incentives, government has the opportunity to stimulate the demand for skills associated with solar products, installation and services, and thus further reduce the cost of solar energy for households and commercial sectors by increasing economies of scale.

Another option is to subsidise solar compa- nies, as Asian governments have been rumoured to be doing. This would mean providing land and equipment subsidies so that large-scale solar grids can be set up to produce more solar energy and further stimulate businesses in the sector. State-owned power utility Eskom has assisted with subsidies for solar geysers in rural and township households, which is a step in the right direction, but, for solar PV to become a viable option, industry players and potential stakeholders (including Eskom and government) need to broaden their thinking.

This is especially true because, currently, renewable-energy supplies are intermittent and need to be supplemented by greater baseload capacity, although this need would decrease with the broader adoption of solar power across the country. This reality must also be weighed against the benefits of distributed generation from renewable energy, namely reduced transmission losses, the use of a wider geo- graphical spread in which natural resources like the wind and the sun can be mobilised to comple- ment existing systems and the potential to avoid costly investments in infrastructure that relies on fossil fuels and cannot be developed quickly.

The research study also demonstrates that solar PV is the most geographically localised of all power generating sources, as it can be established almost anywhere in the country, close to demand points and on a relatively low capital scale, allowing a multitude of players and greater diversity of ownership, with the economic benefits being felt in every market rather than in one centralised location, as is the case with centralised projects, such as Eskom’s Medupi, which is currently under construction.

Further, since jobs created during the installa- tion process constitute the biggest share of the total employment impact created by solar PV technologies along the value chain, the impact of solar PV localisation on employment in South Africa could be significant, provided that the built programme is long-term and there is provision for increases in capacities year-on-year.

South Africa’s sustained energy supply necessitates a long-term vision. The time is ripe for the larger-scale inclusion of solar power in South Africa’s energy mix. As the cost of renewable energy decreases globally, solar is increasingly becoming the most viable option for addressing some of the country’s energy deficits. In order to capitalise on this opportunity, we need all stakeholders on board and the full support of government. The technology is now available, and adjusting the necessary policies to diversify our energy mix will allow flexibility and security in the energy sector, while reducing carbon emissions and easing the energy deficit which all citizens so keenly feel.

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