DA ’ s red faces over municipal ‘tax on the sun’
Ratepayers outraged by R623 surcharge on residents with solar
● A DA-led municipality in the Western Cape that has imposed a R623 monthly surcharge on residents who install solar power appears to be rowing back on the decision amid outrage among ratepayers and a veiled rebuke from a senior party MP.
Some residents of the Cape Agulhas Municipality (CAM) — which includes Bredasdorp, Napier, Struisbaai and Arniston — have boycotted the R623 item on their bills, first levied in January.
The levy — a “network capacity tariff”, according to CAM — appears to have embarrassed the DA, coming two months ahead of elections in which pollsters say the party’s absolute majority in the Western Cape could be under threat.
“In the midst of sharply rising living costs I would encourage the municipality to commit to reviewing the solar surcharge through renewed community consultation with a view to finding an amicable resolution to the current impasse,” MP Nick Myburgh, in whose constituency the municipality lies, told the Sunday Times.
A WhatsApp group for opponents of the surcharge has attracted more than 120 members.
“We should do what the Gautengers did with e-tolls,” one member of the group, Pieter Pretorius, said. “Refuse to pay, and now they are scrapping the entire e-toll system in the city.”
About 10 members of the group said they were refusing to pay. “Who gave CAM the right to tax the sun?” asked one.
Karen Donald, a member of the CAM mayoral committee for finance, said the pushback had prompted the municipality to consider changing the terms of the surcharge or even scrapping it.
She said all residents, whether they had solar or not, had until recently been paying a basic energy availability charge of “about R400” a month, but CAM — in urgent need of revenue — had decided to charge people who had solar more.
This, Donald acknowledged, had been “a red flag” for ratepayers.
“We’re in the process of changing that policy … and finding something that is more fair for all.”
This included adjusting tariffs according to income levels. “Or we will stick with the basic charge and completely do away with it [the extra solar charge]. All those options are on the table.”
Donald said those who chose to feed their solar electricity back into the grid could quickly earn enough credits to cancel out the R623, and CAM would provide a free bidirectional meter to make this possible.
Peter Surtees, chair of the Napier Residents Association, said the fact that it was currently a flat tax was “unique and repugnant”.
“Think about all our taxes: income tax, VAT, donations tax … In every case the tax or duty is based on an underlying value. This swingeing surcharge is not based on any such criterion,” he said.
“The sun provides energy to the panels; the panels translate this into electricity which they feed to the inverter; the inverter charges the battery; the battery runs the domestic or business system. Where in that chain is there any need at all for intervention by CAM?”
Myburgh said the DA believed in “removing or amending regulations and red tape that unnecessarily inhibit and restrict the uptake of new renewable energy generation capacity”.
“High charge levels may discourage the establishment of ‘prosumers’ who feed electricity back into the grid. This would be counterproductive to the policy aims of the DA, which entails encouraging greater usage of renewable energy by households.”
The party therefore advocated “for either no or low charges being levied on households who utilise solar panels, and feed their electricity back into the grid”.
Donald said CAM, like municipalities around the country, was battling to make ends meet, largely because of the energy crisis.
“We’re losing income on electricity; municipalities should, in theory, get 30% of their income from electricity. Municipalities are run by their electricity income. So loadshedding is already placing enormous strain.” And during load-shedding CAM had to run the pumps that keep reservoirs full with generators, so that residents “can flush the toilet”.
“We’re looking at R37,000-R40,000 a month on diesel; and you’ve got to pay overtime because you’ve got to send somebody up the mountain to turn the generator on or off; that person has to be on standby, so it costs you standby employee costs,” Donald said.
“It’s a balancing act to keep the municipality sustainable, at least break even, and to serve the people. And fill the potholes … while there are no more national grants, and an election around the corner.”
She said CAM was in the process of drafting its annual budget, and any changes in the solar tariff policy would be reflected in that.
Ferreira is a CAM resident who has a ● solar system.