Municipalities should light the way in involving communities in energy solutions

OUTA’s Community Action Network (CAN) initiative calls on municipalities to enable businesses and residents to sell excess electricity to the grid, and use this as a way to help low-income households offset their power costs

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07/02/2023 11:13:23

Municipalities should light the way in involving communities in energy solutions 

Loadshedding has negatively affected every single person in South Africa and public frustration and anger are at boiling point.

According to research consultancy Intellidex, loadshedding costs our economy between R150 million and R250 million per day. It also costs us jobs, peace of mind and investors. Yet it seems that the government is far from addressing this matter, and politics are getting in the way of positive change.

So, what are the solutions? And do we have to sit and wait for national government to implement these?

A big part of the solution to our electricity problems lies with us, the citizens, rather than with politicians, says Julius Kleynhans, OUTA Executive Manager responsible for the Community Action Network (CAN) initiative.

This was underlined with the City of Cape Town’s announcement last week that it has obtained the required permission to not only generate its own electricity, but that plans are well underway to allow residents and businesses to sell their excess electricity back to the City.

Unfortunately, it seems that Cape Town is the exception when it comes to finding real solutions that work to the benefit of its residents during this energy crisis. 

“Citizens and businesses in other parts of South Africa should be inspired by what’s happening in Cape Town, and insist on being part of the solution in our own towns and cities. If Cape Town’s decision-makers could get the necessary permission to generate their own electricity and allow residents to do the same, then we need to know what’s stopping other municipal authorities from doing the same,” says Kleynhans.

“We urgently need the legal authorisations for customers to feed back excess electricity into the grid and be paid for this.”

Many other countries benefit from ordinary residents and businesses who generate solar power on the roofs of their houses or buildings and sell it to the electricity utilities or authorities.

“The biggest short-term challenges will lie with the National Treasury procurement approvals, the NERSA tariff determinations and the promulgation of municipal bylaws to enable this initiative. Cities such as Tshwane and Johannesburg have been sitting on such bylaws for some time and need to finalise these. We must collectively challenge the different levels of government on removing all these obstacles as fast as possible,” says Kleynhans. 

Surplus electricity generated by residents and businesses can reach residents who do not have access to solar power (or municipal power) by way of “wheeling”. In this way, local government can improve and extend services and in the process empower communities and help the economy. 

“There are opportunities to be creative around addressing poverty by enabling marginalised communities to become part of the solution. A potential example for this can be in the form of solar infrastructure development offset by corporate social responsibility programmes and Treasury grants. Imagine if former free basic electricity recipients could now generate electricity and sell the surplus back to the municipality, how much tax money can be saved and what economic stimulation this may create in these communities,” says Kleynhans.

Providing tax incentives to ordinary homeowners is another short-term solution. If homeowners can get a tax break by installing their own solar infrastructure, more people will do it. Currently, only businesses enjoy this benefit, and it's not even well publicised. 

Another practical solution is to implement a rebate system. Residents who supply their surplus solar electricity to the municipal power grid do not need to be compensated in cash, but simply receive a rebate on their municipal account.

All of this, however, needs to happen in a well-regulated environment.  It is essential that everyone who pushes power back into the network complies with these regulations. As an example, homeowners will need a certificate of compliance for their solar systems.

There will also have to be an agreement between the municipality and the resident regarding the compensation rate as well as the power meter that is used. The process also requires good administration on the part of the municipality, something we know from experience can be problematic. It is therefore very important to make use of technology and companies with a good track record of managing billing and maintaining electrical infrastructure on behalf of the municipality.

The new Eskom electricity tariff increase of 18.65% will hit the pockets of South Africans this April. The municipal increase, based on Eskom’s increase to municipalities, will be implemented from 1 July. These increases will be set by NERSA and included in municipal budgets. For example, City of Tshwane tariffs are expected to go up 12.7% in July. 

“Residents cannot afford these exorbitant tariff hikes. Solutions like feed-in tariffs provide cheaper electricity and should help to keep tariffs down,” says Kleynhans.

“It is time to accelerate public-private partnerships to bring about real change and stimulate economic growth. Cheap, sustainable and always available energy creates the foundation for a country’s economy to triumph, and our country desperately needs that to happen.”


More information

A soundclip with comment by Julius Kleynhans, OUTA Executive Director responsible for the CAN initiative, is here.

The Community Action Network (CAN) is an OUTA initiative which focuses on organising communities to participate effectively in local government affairs. More about CAN is here.

Picture: Needpix