South Africa considers net metering

South Africa’s Pretoria-based National Energy Regulator has published a draft proposal to introduce a net metering framework to the country’s energy landscape. With state-backed utility Eskom currently struggling to meet the power demands of Africa’s second-largest economy, regulators believe that a more incentivized program will tempt homeowners and businesses to install solar PV systems and feed any excess power they generate back into the grid.

The proposal would follow in the footsteps of similarly successful schemes in Germany, Australia, Spain and some U.S. states. “There is growing interest from South African electricity customers to install rooftop PV systems in order to reduce their electricity bill and supplement their consumption,” said the draft discussion paper.

Investment into solar PV in South Africa recently topped $10 billion following the latest round of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). The close of the third bid window saw the amount of PV projects procured top 3.9 GW, with more than 3.6 GW targeted for the next two rounds of bids – a further indication of the thirst for solar power in the country.

However, sole utility Eskom recently announced that the country’s electricity rates will rise by as much as 13% from April – ahead of the 8% previously planned – as the state-backed company looks to claw back some $666 million in unbudgeted costs it has incurred over the past three years.

Hence, the National Energy Regulator’s proposal is to introduce a net metering proposal measured in kilowatt-hours rather than rand, with small-scale generators able to produce more than they consume and then earn credits for any excess power they feed to the grid. Any unused credits at the end of the billing year will be forfeited. "This reduces any incentive for the customer to oversize generation with respect to load," the draft paper said.

Eskom admitted late last year that it was experiencing serious grid constraints that were slowing the connection of some of the round-three projects approved under the REIPPPP. These delays are harming the wider solar PV industry’s growth, which has been set an installation target of 22.5 GW by 2030.