What going off Eskom grid really entails
If global climate change was not a good enough reason to get off the grid, load-shedding in SA should be. But for the average home, it is not as easy or cheap as it might seem,
Lisa Steyn reports in the first of a three-part series this week. In the first instalment, she speaks to Scott Andrew, MD of Get Off Grid, a Johannesburgbased supplier and installer of solar power solutions.
ON A NORMAL BEAUTIFUL DAY, I ’ M 100% OFF GRID, BUT WHEN I HAVE MISERABLE CONDITIONS, I CAN BE 50% OFF GRID
INSTALLERS SHOULD BE ABLE TO PRODUCE A PV GREEN CARD, AS ENDORSED BY SAPVIA, UPON COMPLETION OF A PROJECT
• If global climate change were not a good enough reason to switch to greener energy sources, load-shedding in SA should be. But for the average home, it is not as easy or as cheap as it might seem, Lisa Steyn reports in the first of a three-part series this week
Load-shedding can drive people to madness and no-one knows it better than Scott Andrew, MD of Get Off Grid, a Joburg-based supplier and installer of solar power solutions.
“I’ve had some ludicrous situations,” he says. “Two guys had a punch-up in the shop fighting over the last battery in the warehouse. It was almost like we’d run out of water.” During periods of loadshedding, the receiver of the office phone literally hangs off the hook and over the dustbin.
Load-shedding continues to haunt SA as monopoly power utility Eskom has warned that another 18 months of rotational power cuts are in store. Persistent power cuts are taking a toll on the economy, dissuading new investment and in 2019 nudged SA into a recession for the second time in two years.
But business is booming for Get Off Grid. Despite relying solely on word of mouth, in the past two years the company has more than tripled its turnover year on year, says Andrew.
“It can’t carry on indefinitely, but I think because of the present state of affairs in SA, if you are competent and you are using good product, you would battle to fail.” Those products, solar systems, are supplied by Victron Energy, a Dutch company that, according to its local business development manager Gerrit Tromp, is the most popular brand in SA.
“We sold €16m last year and are standing on €6m this year already,” Tromp says. Though Get Off Grid cut its teeth in the residential market, the focus is now primarily on the lucrative commercial sector.
Andrew admits that he often regrets the company name when people walk in, professing their desire to “get off grid”. Turns out that cutting ties with Eskom entirely is not really practical. For small-scale generation of one’s own power, solar is really the only way to go and there are two main options when it comes to such installations: a grid-tied solution and a hybrid solution.
TWO OPTIONS
Grid-tied systems are simple and consist of solar panels and an inverter. They are ideal for office and retail spaces that consume most power during the day. These installations have an average return on investment of three years and a life expectancy of 25 years. But, as Andrew explains, such installations are by no means off the grid but rather work in conjunction with the grid. While this solution works for many businesses, it’s not the best option for residential properties, because of load-shedding.
“Whether you spend R20,000, R50,000 or R100,000, when there is a power cut the lights go off and your security systems are compromised,” he says.
With a hybrid system, the likes of which is installed at Get Off Grid’s offices, solar power is produced in the same way, but where it is not consumed, it goes into a battery bank, ensuring that even when the grid supply is cut off, the system continues to operate. When the battery bank gets low, the system automatically draws additional power from Eskom.
“On a normal beautiful day, I’m 100% off grid, but when I have miserable conditions, I can be 50% off grid,” Andrew says.
When it comes to hybrid technology, the cost is about three and a half times that of embedded. And, if you assume an average annual escalation in Eskom costs of 10%, the return on investment is about seven years. But even with this solution, it’s not really feasible to be completely independent of the grid.
“In my home, I’m 90% off grid,” says Andrew. “In order for me to cater for some extra clouds today, I‘d have to spend another R100,000 to be 100% off grid.” Andrew warns that the industry tends to attract a number of fly-by-nights, typically electricians who are short on work and “think they can just stick panels on the roof and away it goes”. Regulation also has to catch up. “When you sell your house, there is a certificate of compliance on electrical wiring and plumbing, but nothing about the solar installations,” says Andrew.
Installers should, however, be able to produce a PV green card, as endorsed by Sapvia (the SA photovoltaic industry association), upon completion of a project.
The SA Bureau of Standards has been working on a standard for seven years, which is expected to come into force by July 2020. Insurance firms, meanwhile, are increasingly requiring assurances of compliance in covering solar installations.
Sapvia COO Niveshen Govender says all home systems that connect to the grid in any way have to register with the municipality. Andrew, however, says there is a lot of confusion and even reluctance among consumers to register hybrid systems for fear of being taxed on them.
While you can expect to pay about R200,000 for a hybrid system for a medium-sized home, Andrew says generating one’s own power off grid is not just reserved for the rich.
“Even a guy with not a lot of money can start with a smaller, decent-quality system, and grow it over time.”
There is a multitude of reasons one might want to defect from the national power grid. For environmentally conscious consumers, there is a growing social imperative to rightly move away from polluting coal-fired power, which governments and industries worldwide are coming under pressure to do to reduce the risks of climate change.
Sadly, there is additional motivation in SA. Eskom is simply unable to meet the country’s power needs as maladministration and corruption have gutted the institution. While hard at work to get back on its feet, Eskom has warned the public to expect at least another 18 months of load-shedding at the same time that electricity prices continue to rise.
The effect of the power supply crisis on the country can be seen in the disappointing GDP numbers. SA recorded negative growth in the final quarter of 2019 — its second technical recession in two years. Evidently, the motivation to reduce reliance on SA’s power grid is clear. So what’s the hold-up?
When it comes to industry, where there is an obvious economic imperative and a great deal of pent-up demand, the obstacles have been well documented. For businesses wishing to produce more than 1MW of their own power — enough for 650 average homes — this entails a drawn-out licensing process, though the government has promised to cut the red tape to free up independent power supply.
While much has been said about the business imperative to reduce reliance on the grid, less is known about the options for households, which have also been hit by power cuts and rising electricity costs.
In a three-part series published this week, Business Day looks into the solutions available for SA households to reduce their reliance on the national grid — and what is preventing their uptake. Homeowners wishing to reduce their reliance on the grid have it easier in terms of regulation — they are not looking to produce all that much and only have to register their systems.
On the technology options, the prices of solar panels have come down, while batteries are now more affordable. A simple grid-tied system is an affordable offer, but what some consumers don’t realise is they will be cut out in the event of load-shedding.
But being off-grid — once better associated with rural areas and far-flung hippie communes — now seem more the purview of the rich. For a system that takes a medium-sized home almost entirely off the grid, a homeowner can expect to fork out about R200,000. That’s not exactly the sort of investment an individual makes at a time when confidence in SA remains shaken, the economy is depressed and — anecdotally at least — many of SA’s wealthier citizens are moving abroad.
Governments in many other parts of the world offer financial incentives, rebates and tax credits to encourage more homeowners to take up solar energy systems. It’s this type of incentive the Cyril Ramaphosa government should consider offering if the broader goal is to ease power demand from the national grid and bolster its climate-friendly credentials.
There is a glaring gap in the market for innovative and affordable financing for off-grid systems in SA homes. There are other options apart from funding an installation through a personal loan or extending one’s bond.
According to industry estimates, about 100,000 households have installed some sort of solar system over the past two years. But that is a drop in the ocean of an estimated 14.5-million households in SA. The sad reality might just be that South Africans — so overwhelmed by poverty, inequality and unemployment — are just not as sustainability-minded as we like to think we are.
For real change to take root, we shall have to start thinking about the long term more seriously and the government will have to lend a supportive hand to those with the financial means to reduce their households’ carbon footprint.
THERE IS A GLARING GAP IN THE MARKET FOR INNOVATIVE FINANCING FOR OFF-GRID SYSTEMS