Can I Sell Electricity in South Africa?

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Categories: Advice

The surge to go green in several European countries and America came about in 2010, when a Feed-In Tariff was introduced. This meant that people who generated excess electricity through renewable sources, such as solar power, could actually make money. Unfortunately the same cannot be said for South Africa. At the moment the only place where you can consider selling electricity back into the grid is in Cape Town, but it’s not really the same thing. But before we get into the option Cape Town presents, let’s look at why South Africa isn’t too keen on buying electricity from the people.

The Problem

The fact that we only have one electricity supplier makes things a little difficult, especially when the government sees it as a source of income. Acting as the middle-man, municipalities buy electricity in bulk from Eskom, which is then re-sold to residents. In fact, a big portion of the profit is used to fund local services, although it doesn’t really seem that way. But municipalities depend a great deal on people paying for power through them. This is also where the problem comes in.

As it stands only high-end users are in a position to install a solar power system with excess energy, which can be fed back into the grid. At the same time municipalities fear that high-end users make the switch, because it will have two negative consequences. Firstly, most of their money comes from these residents and they don’t want to lose them for obvious reasons. Secondly, it’s going to force the poorer residents to pay more for electricity.

The One Option South African Residents Have

It’s safe to assume that government is going to prevent the selling of electricity by private entities for as long as they can, but the city of Cape Town is trying to implement some changes. Even though you can’t make any money through feeding electricity back to the grid, it can dramatically decrease your bill. It should also be mentioned that the rules and regulations for becoming a provider is still filled with hick-ups, so it won’t be an easy task. But before you jump on the bandwagon, this is what you need to know.

You have to qualify as a net user. In other words, you have to buy more electricity than you sell. With the Cape Town program you’ll get about 50% back of what you pay per kWh, which means you don’t actually make any money like European citizens do. In addition to only getting half of what you pay for electricity, there is a small tariff you have to pay per day in order to stay part of the system.

The Bottom Line

At the moment South Africans will have to make peace with the fact that they can’t really sell energy back to the grid, unless they live in Cape Town. Some might argue that you’ll save more by installing some decent batteries rather than feed excess power back, but this is a discussion for another time.

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