South African City To Offer Cash For Solar Power

• Cape Town has opened applications for the 1st round of its Cash for Power scheme for solar power generation 
• It will pay households and businesses for the excess power generated and fed into the national grid 
• Businesses will also be able to sell power to each other and wheel it across the grid 

The South African City of Cape Town has announced its Energy Strategy for 2050 to deal with power supply deficit in the country. Centered around decentralization, it includes a Cash for Power program under which the government will buy excess solar power from homes and businesses. 

"We will buy as much solar power as households and businesses can sell to us under the Cash for Power programme," said Cape Town Mayor Geordin Hill-Lewis. "And in another first, we are enabling businesses to sell power to each other and wheel it across the grid, which will add 350 MW of decentralized power to Cape Town's grid in time." 

It has opened the 1st call for Cash for Power for existing residential customers on home user tariff and an approved grid-tied Small-Scale Embedded Generation (SSEG) system and bi-directional automatic metering infrastructure (AMI) meter. 

The Cash for Power scheme is an improvement over the previous arrangement wherein SSEG customers were required to remain net consumers. Now instead of buying more electricity from the network than they fed in, the consumers can sell excess generation to the grid. 

All electricity fed by such consumers into the grid will be measured and credited to their monthly municipal account at 77.49c/kWh + 25c/kWh incentive for commercial customers. Residential customers will be eligible for 87c/kWh + 25c/kWh incentive. 

"If customers are interested to go above and beyond this, they can register and get cash for their power – where any remaining credit will accumulate until it reaches a certain amount and then the City will pay you out," added Mayoral Committee Member for Energy, Councillor Beverley van Reenen. 

Cape Town opened the 1st round of applications for Cash for Power scheme on February 12, 2024 to be submitted till March 8, 2024. Details are available on the government website. 

The Cape Town scheme is coming into effect a year after being approved by the National Energy Regulator of South Africa (NERSA). Under its Energy Strategy, the city plans to add up to 1 GW of independent power supply to end loadshedding in the city over time. Over the next 5 years, it entails adding 650 MW of this capacity to the city's power mix. 

"In the short-term, we are planning for four stages of load-shedding protection by 2026, as we make the great transition from unreliable, costly and fossil fuel based Eskom energy, to an increasingly decentralised supply of reliable, cost-effective, carbon neutral energy from a diverse range of suppliers," added the Mayor. 

South Africa's power woes have led to massive load shedding in the country over the last 17 years, impacting the economy and general populace. The government has been trying to diversify its energy generation resources, including with renewable energy auctions at the national level. Round 7 of the REIPPPP was launched in December 2023 (see South Africa Launches REIPPPP Bid Window 7).