Cape Town ‘wheeling people’ to give loadshedding, poverty and pollution another deadly blow

Released by Cofesa

Mayor Geordin Hill-Lewis is wheeling people to buy electricity from each other. Every roof becomes a micro-power station, a micro-enterprise becoming a leader in clean green solar power and a friendly destination for entrepreneurs.

Third parties can start selling electricity using the Cape Town grid – “Wheeling allows people to buy electricity from each other using existing Eskom’s and Cape Town’s grid infrastructure” announced Cape Town Mayor Geordin Hill-Lewis.

‘His announcement is a decisive blow to beat poverty, Klop armoede, beat loadshedding and pollution.  Like in Vietnam, changing to solar power will beat poverty in SA and on the continent. Within just a few years, solar power from the rooftops of homes in Vietnam now delivers surplus power. Green Power now generates 10% of SA’s power needs. It can easily increase to more than 20%’ says Dr. Wessel Swart, former senior director at Eskom, a proponent of the Vietnam model. He has a doctorate in green energy and for decades solar-panels have been supplying his farm with electricity.

For Cape Town rooftop-entrepreneurs will boost GDP as in Vietnam and Bangladesh- ‘Like in Vietnam and Bangladesh this model will transform the Cape’s economy and economies in Africa’ say Cofesa’s Dr Lawrence McCrystal chairman and Adv Hein van der Walt director renown for establishing incubators and promoting entrepreneurs. Vietnam increased their GDP four times and Bangladesh increased their GDP five times.

Resilient micro-traders in energy will beat energy poverty. Households with affordable access to electricity are three times more likely to start a small business. Light, power and the internet make households resilient and break the vicious circle of poverty now spirals inwards with the impacts of load shedding and less access to affordable power. Cape Town’s initiative will bring affordable solar energy solutions for poor households and disrupt entrenched inequality and deep poverty. 

Cape Town’s purchase agreements- Mayor Hill-Lewis said  “Sales will be governed by bilateral power purchase agreements within a market environment, as opposed to a regulated environment, as the price of the energy is set between the parties and not by the city, Eskom or the National Energy Regulator of South Africa. “This is the business end of our pilot, following the development of the billing engine and the completion of wheeling agreements,”. It is part of a long-term project to reduce the impact of Eskom loadshedding. The pilot project should culminate in the full-scale implementation of wheeling in the Western Cape capital by the end of the year.

Cape Town’s Cash-for-Power programme offers households and businesses cash for their excess rooftop solar power and has raised its residential small-scale generation tariff by 10.15% for 2023/24, with an added 25c a kWh incentive.  Residents will be able to start selling power for cash later this year.

Cofesa supports Cape Town’s mission to transform Cape Town’s 600 000 electricity customers into green entrepreneurs, to make Cape Town a leader in clean green solar power and a friendly destination for entrepreneurs.  

Cofesa passionately promotes enterprises and presented papers worldwide at entrepreneurship conferences. Buying power for cash from households will create sustainable green micro-enterprises and revolutionise our economy at a time where 45% of our population goes hungry and entrepreneurs faces adversity. Government spend R750 000 to create one job of which 75% fails within the first year.

Instead of a few, big installations many small, localised power producers will catalyse economic change, Cofesa said. The private sector has more than R1-trillion available for green power generation:

FNB pioneered ‘quickest’ loans for green solar power installations;

FNB Finance in six minutes- The Nav Energy platform has been built as a one-stop shop for all things energy-related, from educational content to products, and what the bank says is the quickest loan application option in the market, taking only six minutes, selling inverters, UPD systems, solar backup and complete off-grid solutions from its banking app. The bank offers solar home loans to new and existing mortgage accounts for both FNB and non-FNB customers.  Solar loans will range from R50 000 and will be capped at 15% of the house value.

A relieve when SA counts the cost of spoiled groceries, ruined appliances and bankrupt small businesses. The lowest cost option is to finance UPS devices from R149 a month over two years. FNB Wealth and Investment CEO Sizwe Nxedlana said the bank has already pre-approved a million clients for these contracts.

The bank has vetted the suppliers whose solutions it is prepared to fund, taking the burden off its clients to encourage them to use FNB’s offering. FNB CEO, Jacques Celliers, said this was also a trust-building mechanism for the bank. ‘’The range we are giving access to will start from small UPS devices to full photovoltaic solutions that can give mostly off-grid execution,” said Nxedlana.

The loan to fund solar starts from R50 000 and can go up to 15% of the home’s value. If a customer had obtained only 100% financing for their bond, FNB would be willing to increase that by an additional 15% and then increase the valuation of the property in line with the future installation. That way, the customer would pay one loan with interest rates aligned with their credit profile.

The bank is also willing to finance solar installations through unsecured personal loans, which it hopes will help low-income households. “We’ve got quite a lucrative eBucks deal for people who will switch their home loans to us,” said Nxedlana. He added that FNB plans to launch a leasing finance option for funding solar installations in the next two months.

How much households and schools can save on electricity (Case study)

Household Total use R1,786.50; Electricity R782.19  Levies: R 1, 004.00 potential savings with solar R1 004.00 that can be used to buy gas or used as instalment for system.

Made up of City Power(Joburg) 446.000 kWh @ R1.7538= R782.19 (plus service fees – R181.94, Network levy- R589.35 VAT R233.02) = R1,786.50 saving R1 000.

A school (with 1 000 learners)- its total account amounts to R 132, 642.67  Levies: R 65,810.84. Savings with solar up to  R 66 832.00.

Power consumed at City Power 35,512.000 kWh @ R 1.8523 – R 65,810.84 (plus reactive energy charge R217.63, Network surcharge kWh: R 2, 130.72 ‘Demand charge’ energy charge:  R44,872.57, Service charge :R2,309.69, VAT 15.00% : R17,301.22 = R 132, 642.67

Cofesa called on Government to cancel import duties and VAT on solar equipment and offer more than the proposed tax rebates –   

Businesses can claim a 125% tax deduction (in the first year) for qualifying capital expenditure in respect of all renewable energy projects, with no threshold on generation capacity. The enhanced incentive will be available for a period of two years and apply to investments in renewable energy projects brought into use for the first time on or after 1 March 2023 and before 1 March 2025.

Individuals will be able to receive a tax rebate to the value of 25% of the cost of any new and unused solar PV panels, up to a maximum of R15,000, available for a period of one year (1 March 2023 to 1 March 2024)

Cape Town will earn carbon credits like Vietnam and Bangladesh beat loadshedding, pollution and poverty 

South Africa, the world’s 13th-biggest source of planet-warming gases, relies on coal for more than 84.4% of its power; an air pollution hotspot, where millions of South Africans breathe poisonous air. South Africa’s emissions in 2021 from electricity production still outpaces other African nations like Egypt and Kenya. “Eskom’s sulfur dioxide emissions in 2019 exceeded those from the power sectors from each of the world’s three largest economies.   Government, and consumers must accept a green post Eskom future- Eskom gambles with continental and global health.

Bangladesh increased their GDP five times. Millions of energy traders emerged. Mini-solar stations charge lithium-ion smart batteries and rent it out for Tuk-Tuks to become virtual power plants that sell about 30% of their surplus power to the national grid. Or they use it at night at their homes and with ‘pay-as-you-go’ cell phone apps sell power to their neighbours through connections installed by private firms.

Tuk-Tuks reported 60% boosted monthly earnings, free from lead acid batteries toxic fumes.

Make every roof a micro-power station, a micro-enterprise that sells power and beat poverty- The country’s 17.95 million homes, 22,740 government schools and 2,154 independent schools, 5.9 m small businesses, 718,796 factories, 50 sports stadiums,1,179 churches, 50 universities, about 5,000 government buildings, 4,270 hospitals and clinics, 800 community centres and 200 000 combi-taxi’s. 

Solar power saves our forests biodiversity-

Solar power replaces dependence on wood and avoids deforestation. This enables micro enterprises such as ‘Mobility Africa’ of Ms Shantia Bloemen . She imports low-cost small electric vehicles, tricycles and bikes, in module, assemble them, recharge the batteries at depots, rents it out and provide low interest rate financing.

Privately financed micro enterprises will revolutionalise and grow our economy.

Oher cities are following Cape Town to purchase power from factories (and soon also from households) as in Germany and America.  Some farmers feed surplus power into the grid for Eskom to store.

Cofesa applauds the concerted drive by the banking sector to finance micro-enterprises. It will change the trajectory of our economy and beat poverty.

Sincerely 

Dr Lawrence McCrystal, BSc London University, B Econ (Hons); M Econ; PhD Economics, (Honours & Masters – Cum Laude), Chairman, Adv Hein van der Walt,  Dr Wessel Swart, Pr Eng. Ph. D (Stell), B Sc (Eng) Chemical (Wits) B Proc (Unisa), Energy Specialist.

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