Buffalo City Municipality loses R350 million income to private solar power

  • South Africa’s Minister of Public Enterprises, Mr Pravin Gordhan, has confirmed that solar panel-generated electricity increased by 350% from March 2022 to March this year.
  • He was answering questions from DA MP Ghaleb Cachalia in parliament yesterday. 

“This increase in reliance on renewable energy is a welcome development for the environment, but poses a significant challenge to municipalities, which derive the majority of their income from electricity sales,” Gordhan said.

He added that Buffalo City in East London has lost R350 million in income as a result of solar power deployment by the private sector.

“The uptake has been driven largely by customers seeking alternative energy sources due to load-shedding, followed by those wanting to buffer against the upward annual electricity tariff trends and those pursuing greener options aligned with climate change objectives. The uptake of small-scale embedded generators (SSEGs) has resulted in the displacement of traditional grid-supplied energy volumes,” said Gordhan.

Related news: South Africa has unsustainable and growing muniscipal debt owed to Eskom skywards of R56 billion

The country has seen a flood of private sector solar PV projects totalling 2899MW since the amendment of Section 2 of the Electricity Regulation Act by the Department of Mineral Resources and Energy (DMRE) in August 2021, which allows the operation of a generation facility with a capacity of up to 100MW without obtaining a licence from the National Energy Regulator of South Africa. Read more

The South African Wind Energy Association (SAWEA) and South African Photovoltaic Industry Association SAPVIA recently conducted a ‘Renewable Energy Grid Survey’. The survey reveals that 13305MW of solar PV and 19572MW of solar PV with battery storage are ‘shovel ready’ (construction ready) or close to it. Read more

Chinese customs data compiled by Ember Climate show that South Africa imported over 5GW (or US$1.1bn) of solar panels from China since Jan 2022, with 3.7GW in this year alone.

Author: Bryan Groenendaal

1 Comment

  1. this is welcome development to the country where energy crisis tend to be big challage hence these private sectors need to invest more in solar panel generated electricity to compete with bigy campanys on the market and this will.create big competetion among these campany, that would be reducing the energy crisis that people are experiencing

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