MyPE

Community Business Directory, Event Listings, News and Views from Gqeberha, Nelson Mandela Bay

Is Solar Viable?

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The Nelson Mandela Bay Municipality may come in for some flack for having the 3rd highest kWh electricity tariff but is is streets ahead of other municipalities in South Africa when it comes to an enabling environment for renewable energy as:

  1. It is the only authority in South Africa that allows grid tie at a 1 for 1 basis – i.e. every kWh of energy you produce from a renewable energy installation (solar, wind etc.) is credited to your account – produce the same amount as you consume and, as a private consumer, you can zero your account. There is a proposal on the table that grid tie installations will pay a R50.00 per month charge sometime in the future.
  2. The option to sell excess energy produced from the installation is also possible.
  3. Business get an accelerated 3 year depreciation allowance of 50, 30 and 20%.
  4. NMB still has a way to go to the capped amount of renewable power generation of 10%.

Based on the above the payback in NMB for private consumers is now around the 6 year mark and under 3 years for business – compelling reasons to generate one’s own power.

The simple sum when it comes to Solar looks like this:

  • Assume you pay R150 000.00 for your Grid Tie only system
  • Assume that system has a life of 25 years
  • Assume that the system efficiency degrades by 1% every year from a 95% efficiency on Day 1
  • Assume 6 hours of sunlight per day
  • Assume a 5kWh system is installed

Your system will produce 235 485 kWh’s over 25 years.

Divide the purchase price by the number of kWh’s produced and the number you get is R0.6369 per kWh.

IF the price of electricity increases by 8% per annum each year for the next 25 years then we will be paying R10.65 per unit in year 25.

Wouldn’t you rather be paying a fixed tariff of R0.6369 per kWh for the next 300 months?

Related: Straton Solar

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.