How much you can save on electricity by switching to solar

South Africans can convert a sizeable portion of their electricity supply to self-generated solar and save between 80-90% on their electricity bills while paying off their system.

Eskom was recently granted an average electricity tariff increase of around 10% and is expected to implement more price increases in the coming years.

The utility’s operational costs have surged due to increased reliance on expensive diesel-powered emergency generation and renewable power purchases from independent power producers.

MyBroadband recently spoke to AWPower managing director, Christiaan Hattingh, to find out how much installing a solar-powered system at home could save on your electricity bill and roughly how long it would take to pay off such a system.

AWPower is an energy solutions provider that performs professional grid-tied and off-grid solar installations, with most residential and business customers in Gauteng and the Western Cape.

A residential solar installation in Newlands, Cape Town, installed by AWPower

A common belief is that the cost of self-generated power and backup systems negate the benefits of saving on electricity tariffs charged by Eskom.

Hattingh told MyBroadband that this was mostly true for complete off-grid systems.

“The costs of specifying a system with inverters, solar panels, generators and battery storage to provide complete grid-independence are too high to be attractive for most properties,” he stated.

However, households could get compelling savings on their monthly bills with a modular solar installation that is appropriately sized specifically for their power consumption levels.

Hattingh said with battery-less systems, you can cover up to 35% to 50% of your bill, as this would be what most households consume during the day.

Naturally, this would depend on how much electricity you can consume and how extensive your solar array is.

“The more solar panels you install, the more of your day-time electricity consumption will be catered for by your solar generation,” he said.

Adding batteries would come at a high cost but would allow you to save on nighttime consumption as well.

Hattingh said a “bread-and-butter” system that most households could benefit from would typically have a 5kW inverter, 10kWh of battery storage, and solar panels that could generate around 3-4kW of peak power.

AWPower configured a system for a customer with a bill of around R1,400 per month on Cape Town’s home user tariff, equal to around 600kWh of consumption per month.

Its combination of 4.5kW of panels, a 5kW inverter, and a 10kWh battery cover an estimated 80-90% of their bill.

That includes considering what it can do in summer and winter and combining that into an average.

Hattingh said such a system would cost between R150,000 and R160,000, excluding VAT.

Payback time

Hattingh said that it would take between 8 and 10 years for a return on investment with the system for typical homes.

Based on the City of Cape Town’s home user tariff, annual electricity price hike of just over 9%, and the household’s usage, the payback period on the above-mentioned system would be roughly eight years.

“There are cases where 3-phase houses that use a lot of electricity can get down to between six-and-a-half and seven years of payback,” Hattingh said.

Commercial setups, which are generally more reliant on day-time availability, can be paid up in short as four to six years, Hattingh added.

Hattingh emphasised that having a large solar panel array was essential for a quick return on investment.

Generally speaking, South Africa has among the best prices for PV modules.

If you generate excess electricity that can be fed back into the grid, you can get credit or discounts from the municipality, if they support this.

Other benefits

The main benefit would be that you would still have power even when load-shedding strikes.

Another future advantage of a PV system that consumers should consider is its ability to help bring down running costs for charging electric vehicles (EVs).

Recharging your EV with power provided by your solar system could offset the amount you would usually have paid to refill your petrol or diesel tank or the cost of recharging using Eskom’s power.

Hattingh also drives a BMW i3 to work and charges it with solar power at the office.

As a result, he said he was “disconnected” from the rising petrol price in South Africa.

Now read: How your home’s load-shedding backup can impact your insurance

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How much you can save on electricity by switching to solar