Alternative electricity supply

[kylis]

Considering the issues with Eskom (I'm sure we don't have to go into depth here), would anyone consider an alternative electricity supply which only involves paying a +- R1 500 bill (monthly and is an annually fixed payment) for electricity powered through solar energy? Rather than being supplied by Eskom with their rates and methods.

Remember this is doing good to the environment, has unlimited use of electricity and no load-shedding will occur as the sun is the source.

Responses will be used in a high school research project.

 

[HavocXphere]

Nope. You'll need to shell out ~200k up front. Mostly because the sun doesn't shine at night so you need battery packs. If a 1.5k option was available most would have done so long ago.

 

[Vegeta]

Maybe he's thinking of renting the solar equipment for 1500pm or paying off an installment on the solar equipment.

 

[kylis]

Nope. You'll need to shell out ~200k up front. Mostly because the sun doesn't shine at night so you need battery packs. If a 1.5k option was available most would have done so long ago.

Details aren't too important here, such as how it is supplied and how it is operated. Solar energy will be supplied to the household full stop. I'm more focused on the end question: will consumers be willing to take a 'greener' option and pay +- R1 500 pm fixed, NO START UP COSTS OR ADDITIONAL COSTS.

Its in connection with how price elastic consumers are in relation to an environmentally safe option of electricity supply.

 

[ScottulusMaximus]

For R1500 a month I would instantly...

HOWEVER

Good luck to a company attempting to do this, it is completely unfeasible.

 

[itareanlnotani]

Pricing would be closer to 150-200k for an average sized house to go off grid with battery, not including ancillary costs like cooking with gas (<10k), and solar hot water heating (20-30k)

You'd be looking at 200k loan.

If one looks at car loans, which I'd imagine would be fairly similar due to loan value / asset values, over a 5 year period, you'd be looking at a 4305.93 monthly payment.
Over 10 years, 2687 a month.
Over 20 years, 1964 a month.

Your 1500 figure is too low unfortunately.

The 10 year period is interesting though, as at a fixed 2700 a month, Eskom pricing will likely get more expensive at/around the 5 year period, making it cheaper to go solar in 5-6 years at current pricing due to their yearly increases.
eg

Year 1
1500
Year 2
1500 + 10% increase = 1650
Year 3
1650 + 10% increase = 1815
Year 4
1815 + 10% increase = 1996.5
Year 5
1996.5 + 10% increase = 2196.15 (close but no cigar).
Year 6
2196.15 + 10% increase = 2415.76 (closer but no cigar)
Year 7
2657.33
Year 8
2923.06
Year 9
3215
Year 10
3536.91

A "mere" 10% yearly increase is a very low ballpark figure though.
Muni + Eskom increases have been higher than this year on year, so in real life the break even figures will likely be in the 3-5 year range.


Battery pricing is dropping (30-40% drop year on year for Lithium), Solar panel pricing is roughly the same for the last year or three (dropping, but the rand increases negate that). Inverter prices are dropping year on year as they become more mass market.
I'd guesstimate that in 5 years, a 200k install will cost 150k assuming the rand stays where it is. In all likelihood though, costs will go up, as the rand is on a heavy downward slope.


We're already at Grid Parity for generation (the price where generating your own electricity costs the same or less than getting it from a supplier).
3-5 years time will see us at Grid Parity with Storage. Thats going to be interesting for Eskom / Muni's, as increasing pricing from that point will just drive consumers to go off grid., aka the Death Spiral.

The Death Spiral is so called, as Consumers go off grid, leaving the supplier, which in turn raises costs for the remaining consumers, who then continue to go off grid, which again raises pricing, until you are left with those who can't afford to go offgrid, and those who can't go off grid for logistical reasons. What Eskom should be doing is encouraging generation, and allowing feedback to the grid, as self generation is funded by the consumer, and the excess electricity can be sold by Eskom to their other customers at their huge profit margins. Thats not happening though, and they're putting up as many roadblocks against that as possible (daily charges, other financial rules that make it unfeasible to feed back).

That works for now, as pricing for solar+storage is still more expensive than Eskom, but in 3-5 years time it won't be.

Tick tock goes the clock Eskom, tick tock.

 

[Johnatan56]

We're already at Grid Parity for generation (the price where generating your own electricity costs the same or less than getting it from a supplier).
3-5 years time will see us at Grid Parity with Storage. Thats going to be interesting for Eskom / Muni's, as increasing pricing from that point will just drive consumers to go off grid., aka the Death Spiral.

The Death Spiral is so called, as Consumers go off grid, leaving the supplier, which in turn raises costs for the remaining consumers, who then continue to go off grid, which again raises pricing, until you are left with those who can't afford to go offgrid, and those who can't go off grid for logistical reasons. What Eskom should be doing is encouraging generation, and allowing feedback to the grid, as self generation is funded by the consumer, and the excess electricity can be sold by Eskom to their other customers at their huge profit margins. Thats not happening though, and they're putting up as many roadblocks against that as possible (daily charges, other financial rules that make it unfeasible to feed back).

That works for now, as pricing for solar+storage is still more expensive than Eskom, but in 3-5 years time it won't be.

Tick tock goes the clock Eskom, tick tock.

Would the government not implement a protective tax in order to make it so that it does not become feasible?

 

[itareanlnotani]

Would the government not implement a protective tax in order to make it so that it does not become feasible?

They can and likely will increase taxes on water, and rates, but how are you going to tax solar?

They currently "tax" solar by charging a daily connection rate - which makes it unfeasible to connect solar without storage currently.
Once solar with storage becomes financially feasible, its a whole different ballgame, as you can just jump ship. What are they going to do? Cut off your Eskom electricity that you don't need and aren't using?

They claim to be all about user pays. If you're not using it, you sure as heck aren't going to be paying for it.

 

[TheMightyQuin]

If one looks at car loans, which I'd imagine would be fairly similar due to loan value / asset values, over a 5 year period, you'd be looking at a 4305.93 monthly payment.
Over 10 years, 2687 a month.
Over 20 years, 1964 a month.

Your 1500 figure is too low unfortunately.

The 10 year period is interesting though, as at a fixed 2700

Neither instance is feasible. Your equipment will have to be maintained and replaced (batteries) during those long periods. Especially the very expensive batteries that just does not last.

With alternative power the biggest and most expensive issue is storage.

 

[P924]

Battery pricing is dropping (30-40% drop year on year for Lithium), Solar panel pricing is roughly the same for the last year or three (dropping, but the rand increases negate that). Inverter prices are dropping year on year as they become more mass market.
I'd guesstimate that in 5 years, a 200k install will cost 150k assuming the rand stays where it is. In all likelihood though, costs will go up, as the rand is on a heavy downward slope.

Prices on batteries have to drop lot. Last I did the calculation, the cost of the cheapest batteries under the ideal use case worked out to ~R2.50/kWh over the life of the battery. That is without taking into account the cost of charging them.

 

[wetkit]

Eish, so much for a thread going off the rails and nobody actually reading the question that was asked

Seeing Eskom’s current state of affairs, would you rather pay them per month according to usage,
or use another "green" supplier, but at a fixed monthly rate, where the supply would be guaranteed?

I would look at the 2nd option, perhaps.

 

[Arthur]

I'd want to know more. Especially about nights and cloudy days.

 

[P924]

Eish, so much for a thread going off the rails and nobody actually reading the question that was asked

Seeing Eskom’s current state of affairs, would you rather pay them per month according to usage,
or use another "green" supplier, but at a fixed monthly rate, where the supply would be guaranteed?

Fair enough.

Would you pay R1500 fixed for unlimited electricity supply? No, my usage of 200 units per month makes it unfeasible, that may change as Eskom deteriorates further. But I know a lot of people for whom it will actually be a decrease in cost, so they will definitely go for that option. That said, I am pretty sure the business model will not work, because people will use more units than you can produce for a R1500 fixed income. Fixed unlimited electricity costs will never work. A better solution would either be just a higher cost per unit, 2x or 3x the Eskom rate, or an additional fixed monthly cost to guarantee supply(green or otherwise.)

 

[TheMightyQuin]

Eish, so much for a thread going off the rails and nobody actually reading the question that was asked

Seeing Eskom’s current state of affairs, would you rather pay them per month according to usage,
or use another "green" supplier, but at a fixed monthly rate, where the supply would be guaranteed?

I would look at the 2nd option, perhaps.

It was a stupid question. There you have it. Might as well ask if we would be willing to pay R1500 per month for wings so we can fly to work and not worry about the petrol price.

 

[wetkit]

It was a stupid question. There you have it. Might as well ask if we would be willing to pay R1500 per month for wings so we can fly to work and not worry about the petrol price.

Well, I think otherwise.
Is it not similar to how we pay for bandwidth?
I can go for fixed line speed with unlimited data, or fixed data with unlimited speed?

 

[P924]

Well, I think otherwise.
Is it not similar to how we pay for bandwidth?

No, because the costing model is completely different, as well as the usage model. If demand is high, bandwidth can be throttled, power not so much.

 

[The_Mowgs]

No at this stage I would not pay that amount seeing as my current electricity is R600pm and although loadshedding is a pain in the ass it is something I can for now, live with.

If my current bill was in the region of R1500pm then I would of course do it.

 

[calypso]

They can and likely will increase taxes on water, and rates, but how are you going to tax solar?

They currently "tax" solar by charging a daily connection rate - which makes it unfeasible to connect solar without storage currently.
Once solar with storage becomes financially feasible, its a whole different ballgame, as you can just jump ship. What are they going to do? Cut off your Eskom electricity that you don't need and aren't using?

They claim to be all about user pays. If you're not using it, you sure as heck aren't going to be paying for it.

The government could raise the tax on batteries and solar equipment. The already got rid of the rebates for heatpumps and solar geysers.

 

[itareanlnotani]

The government could raise the tax on batteries and solar equipment. The already got rid of the rebates for heatpumps and solar geysers.

That would be harder to do, as we're part of the WTO.
Trade barriers and all that. Import duties have to prove harm to local industry.

We don't have a local manufacturing industry for solar cells (those are 100% imported).
We do some panel assembly here, mostly to comply with local BEE regulations for grid scale projects, but the majority of panels are imported.

Lead Acid gets made here, but the future is Lithium, which doesn't have any local manufacturing.

It could happen, but I suspect the large foreign denominated green loans that we've been receiving might start getting caveats to stop that sort of thing.

Its not impossible, but unlikely. Whats more likely to happen is that they'll try to artificially postpone the point where solar+storage reaches grid parity. Which, coincidentally enough, is what's happening.

 

[Johnatan56]

That would be harder to do, as we're part of the WTO.
Trade barriers and all that. Import duties have to prove harm to local industry.

We don't have a local manufacturing industry for solar cells (those are 100% imported).
We do some panel assembly here, mostly to comply with local BEE regulations for grid scale projects, but the majority of panels are imported.

Lead Acid gets made here, but the future is Lithium, which doesn't have any local manufacturing.

It could happen, but I suspect the large foreign denominated green loans that we've been receiving might start getting caveats to stop that sort of thing.

Its not impossible, but unlikely. Whats more likely to happen is that they'll try to artificially postpone the point where solar+storage reaches grid parity. Which, coincidentally enough, is what's happening.

We don't create electronics/phones and yet we have taxes on those. There will most likely be a tax to mitigate the effectiveness of solar/home energy.