Greater grid independence is easier and more affordable than you realise
We are still thinking ‘back in the day’ thoughts when it comes to electricity – for years there was no choice, if you had access to electricity it was supplied by Eskom, and that was it. Considering the near future, and the announcement that beleaguered Eskom wants South African homes and businesses to pay at least 20% more for electricity from 1 April 2018, we are forced to think even harder about our options, and whether we could be spending our money more wisely.
However, conjuring up ideas of having to rewire the house, install wind turbines on your lawn, and hoping the sun will shine to charge up your solar panels for a hot shower is enough to short circuit anyone’s brain into stalling the idea of change.
We need to rewire our brains to think differently about renewable energy and whether we’re still prepared to foot the rapidly escalating bill for service delivery inefficiency and corruption. It’s 2017 and there are some very solid energy alternatives that are making people sit up and think.
Rapidly increasing costs of electricity have rocketed at over 500% since 2007, driven by inefficiencies, lack of governance and reports of endemic corruption within Eskom. The latest revelations are that Eskom’s solvency is one again in crisis and that the power utility is down to R20bn and will not be able to pay salaries in three months’ time. The bottom line is that electricity users are going to take the brunt and foot the bill for yet another massive bailout.
When it comes to your electricity supply and costs, you have the absolute power to take control and do something constructive about it by becoming more energy efficient and grid independent. It’s easier and far more affordable that most people realise, and any investment into making your property more energy efficient will save you money and increase the value of your property at the same time.
One typical suburban family of four living in Benoni, Gauteng engaged with One Energy to get as close as off the grid as possible by converting to solar water heating followed by photovoltaic electricity generation, or PV. The family has already slashed their electricity spend by R235k since they implemented solar, and cumulatively they’ll save another R400 000 over the next five years based on average annual price escalations. According to an independent property valuation, it has also added almost 15% to the market value of their home. With two children at school, two businesses to run and staff salaries to pay, it’s the kind of big money any family and entrepreneur would want to keep in their bank account.
How did they do it?
- From the outset their objective was to reduce electricity usage at home and implement energy-efficiency measures in order to get ‘PV-ready’.
- The two solar geysers they installed saved them 1500kWh of electricity every month (50kwh per day) – a monthly saving of over R2 000.
- They also employed energy saving measures at home from changing to a gas hob, re-setting the pool timer, installing efficient shower heads to reduce hot water consumption and switching to LED lighting.
- These efficiency measures allowed them to buy a smaller and therefore, less expensive PV system by becoming more energy efficient first. The family now generates all their day-time electricity requirements themselves, for free, from the sun by means of solar geysers and a solar photovoltaic (PV) system for electricity generation.
- This family financed the move to PV and pays for it entirely out of their savings on grid electricity – had they not gone this route, their current electricity bill would have been in the region of R4 700 per month.
- Right now, their highest municipal bill is R340 in winter and drops down to under R100 in summer. Even after paying their monthly loan to finance their PV system, they are still putting at least R1500 back in their pocket every month compared to what they would have been paying to council. Once the loan is paid off, they can still look forward to massive savings – and grid independence – for at least the next 20 years.
Another important consideration in the escalating costs of electricity is the fact that the recent ruling by the Supreme Court of Appeal on 6 June 2017 has flung the door open for the approval of further electricity tariff increases over and above the proposed 20% tariff hike, as Nersa will now be able to process regulatory clearing account (RCA) applications by Eskom to recover about R42 bn through further tariff increases. Energy expert Chris Yelland has warned that the judgement has dire implications for the cost of electricity. Add yet another looming state bailout of the beleaguered utility and you soon realise that South Africans and businesses find themselves in an untenable financial predicament.
Our considered view is that the Eskom will propose for massive increases of up to 50%, aiming as high as possible so that any compromise tariff could be in the region of 15-30%, and will be so every year for the foreseeable future.
The cost of doing nothing is unthinkable
Starting at an average electricity rate of R1.75 per kWh (based on Ekurhuleni rates for our case study family), and factoring in a conservative escalation of 15% per annum if Eskom gets its way, our case study family would have paid R494k for electricity over the next five years – and more than doubling their current spend per month in five years alone:
- Total electricity spend in 5 years with no intervention: R494 000.00