<\/p>\n
South Africa doesn\u2019t need to build another power station to ease the cost of electricity. It simply needs to create a market for the surplus solar power already being generated on thousands of rooftops across the country.<\/p>\n
Municipalities could save billions by buying excess electricity from households and businesses instead of purchasing all their daytime power from Eskom, according to a new report by the Public Affairs Research Institute (Pari) called Powering Development.<\/p>\n
Read\/listen:
\u2018Affordability crisis\u2019 replaces load shedding crisis
New electricity price hikes push families deeper into the dark<\/p>\n
Even small amounts of electricity have become unaffordable for 7.5 million households in SA, says the report. Affordability is therefore one of the big issues to solve in the future, particularly as Eskom tariffs continue to rise at levels well above inflation.<\/p>\n
One way to reduce electricity costs is for municipalities to purchase unused solar power that is going to waste.<\/p>\n
Those savings could be worth R2.5 billion a year by 2035 in Gauteng alone, just from surplus rooftop solar power that is currently wasted because municipalities lack the systems to buy it.<\/p>\n
Johannesburg, Ekurhuleni and Tshwane in Gauteng account for just over half of the national total of installed rooftop solar, say authors Tracy Ledger and Clyde Mallinson.<\/p>\n
Surplus power with nowhere to go<\/p>\n
\u201cThe majority of these installations are residential, and most of them produce \u2018excess\u2019 electricity on average over a twelve-month period; electricity that could be produced by the system, but which is curtailed because it has no place to go.\u201d<\/p>\n
This excess electricity is potentially available to municipalities at a rate almost half that which is currently paid to Eskom \u2013 known as the Megaflex tariff.<\/p>\n
Unlike large-scale renewable energy projects, rooftop solar requires no new power stations or long transmission lines.<\/p>\n
The infrastructure has already been paid for by private households and businesses.<\/p>\n
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What is largely missing are the regulatory frameworks, municipal procurement systems and distribution network upgrades needed to make widespread electricity trading possible.<\/p>\n
Municipalities would not simply be buying green electricity. They would also be diversifying their sources of supply and reducing their dependence on Eskom.<\/p>\n
Several municipalities have already begun moving in this direction.<\/p>\n
Cape Town has introduced programmes allowing qualifying customers to sell surplus electricity back into the municipal network, while a number of other municipalities have established or are piloting feed-in tariffs for small-scale embedded generation.<\/p>\n
Read:\u00a0SA\u2019s solar leak \u2013 and how homes and EVs could help fix the grid<\/p>\n
The report notes that while Eskom\u2019s operational performance has improved over the last two years, municipal finances are deteriorating because electricity is their largest expense, and Eskom tariffs have been rising at many times the consumer inflation rate \u2013 as shown in the graph below.<\/p>\n
If things continue as they are, rising Eskom tariffs will make electricity even more unaffordable for households, further threatening municipal revenues and increasing the incentive for illegal connections.<\/p>\n
Eskom tariff increases vs CPI since 2008<\/p>\n
Source: Local Government White Paper Review<\/p>\n
While Eskom tariffs soared, electricity production increased just 9% in the 23 years to 2023. This was at a time when the population increased 30%.<\/p>\n
On a per capita basis, electricity consumption in SA declined 26% between 2000 and 2023, while in China it increased 4 898% and is now 61% higher than SA.<\/p>\n
To create the jobs SA needs, it requires electricity supply 35-50% higher than current levels.<\/p>\n
\u201cThis additional supply cannot be provided by Eskom\u2019s current aging coal-fired generation fleet,\u201d says Pari.<\/p>\n
\u201cSignificant delays in building new transmission grid capacity implies that much of the new grid-scaled renewable capacity may not be able to address this entire supply requirement within the next few years.\u201d<\/p>\n
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Inefficiences<\/p>\n
Though load shedding is officially over, power outages are still a regular occurrence.<\/p>\n
Data from Wetility Energy, based on behind-the-meter solar systems, suggests an average of six to nine outages per household per month in 2025, with 58% of these lasting more than eight hours. The figure is likely worse in rural areas.<\/p>\n
The main reason for these outages is ageing or poorly maintained infrastructure.<\/p>\n
National Treasury has already recognised the weakness of the traditional municipal electricity model, and now demands metro electricity revenues to be ringfenced and reinvested into electricity infrastructure rather than diverted to other spending.<\/p>\n
A comparison of revenue and bulk purchases for the 2025 fiscal year shows municipal electricity distributors had a combined gross surplus of just R25 billion on electricity sales (after bulk costs) to pay for all other costs associated with the service and maintenance of infrastructure. This applies to municipalities servicing 60% of the country.<\/p>\n
The situation is even worse when considering that municipalities are recovering about 84% of the R170 billion they bill annually.<\/p>\n
While the cost of the electricity supplied by the Eskom coal fleet rises each year, the cost of electricity generated by utility-scale solar power is declining.<\/p>\n
This is shown in the chart below. Municipalities now have the opportunity to supplement Eskom purchases with cheaper electricity generated on rooftops already connected to their distribution networks.<\/p>\n
Eskom tariffs vs wind and solar PV costs <\/p>\n
Source: Eskom, Meridian Economics, Pari<\/p>\n
One of the biggest obstacles in transitioning to rooftop solar purchases is what is called \u2018curtailment\u2019.<\/p>\n
This is when a rooftop solar system generates more electricity than the owner can use, but there is no mechanism to sell the surplus back to the grid.<\/p>\n
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Rather than exporting the excess power, the inverter automatically reduces output or switches off part of the system.<\/p>\n
This means clean electricity that could have been used elsewhere is simply wasted.<\/p>\n
The report argues that municipalities could unlock this stranded energy by allowing households and businesses to feed surplus electricity into local distribution networks in exchange for payment.<\/p>\n
The authors recommend that municipalities:<\/p>\n
Establish transparent procurement mechanisms for surplus rooftop electricity;
\nDevelop standardised feed-in tariffs;
\nSimplify grid connection processes; and
\nInvest in smarter distribution networks capable of managing two-way electricity flows.<\/p>\n
The implications for ratepayers could be massive.<\/p>\n
Households and businesses that invested heavily in rooftop solar primarily to protect themselves against load shedding could earn additional income by selling unused electricity.<\/p>\n
Municipalities, meanwhile, could lower their bulk procurement costs while expanding access to cleaner electricity.<\/p>\n
Whether those savings ultimately translate into lower municipal electricity tariffs will depend on local pricing policies and regulatory reforms. But the report suggests that South Africa already possesses much of the generating capacity needed to ease pressure on electricity costs.<\/p>\n
Read: The next energy frontier: Managing all the data<\/p>\n
It argues that SA\u2019s energy transition no longer depends solely on building new power generation. The next power station has already been built and it\u2019s sitting on the rooftops of homes, factories and shopping centres.<\/p>\n
The challenge is creating a market that allows municipalities to buy that electricity before it is wasted.<\/p>\n
#Gauteng #municipalities #save #R2.5bn #year #buying #surplus #rooftop #solar #report<\/p>\n","protected":false},"excerpt":{"rendered":"
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