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SOLA launches its first engineering bursary to encourage solar PV expertise amongst electrical engineers

SOLA has launched its first engineering bursary, giving the opportunity for a final year electrical engineering student to have their tuition paid for and a job opportunity as a graduate engineer in the solar PV field. The move comes as part of SOLA’s broader shared value strategy, that aims to bolster STEM education and give opportunities for young engineers seeking careers in renewable energy to flourish.

“It is a great step forward for us, and one we are very excited about,” said Dom Wills, CEO of SOLA Group. “We know that there are incredibly smart students out there who have faced giant odds to get to where they are. We want to support them on this journey, because that will ultimately make our organisation stronger in the future,” he added.

The bursary is eligible to previously disadvantaged students who plan to enter into their final year of BSc or BEng electrical engineering at a Cape Town based institution in 2022. The bursary will include R75 000 tuition, paid vacation work, and a graduate engineering position after the studies have been completed. 

“We particularly encourage women to apply for the bursary, who have historically been underrepresented in our industry,” adds Wills. “We hope that this bursary can help to demonstrate the viability of a career in renewable energy and encourage more electrical engineers to take this direction.”

SOLA has been a great success story of the renewable energy industry, opening with just four people in 2008 and expanding to in excess of 80 employees in 2021, with some of South Africa’s biggest renewable energy projects under its belt: successful REIPPP bids, South Africa’s first large microgrid project on Robben Island, and securing South Africa’s first large-scale wheeling agreement. The bursary adds to the company’s contribution to South Africa’s economy and its commitment to see South Africa thrive.

Are you interested in applying for the bursary? Click here to find out the eligibility criteria and apply online before 31 August 2021.

What the 100 MW license cap lift means for your business

In June, amid much celebration, Cyril Ramaphosa announced that the amendment of Schedule 2 in the Electricity Regulation Act – a clause that has long had both producers and consumers of energy at loggerheads with government – was imminent. Today, the amendment was officially gazetted. However, what exactly does this amendment mean, and will it affect your business?

The Electricity Regulation Act of 2006 is an important piece of legislation that governs how electricity is generated and distributed in South Africa, and the roles of the various stakeholders involved. Schedule 2 used to specify that any electricity generation activity over 1 MW requires a generation licence. Essentially, this implied the same amount of paperwork for a huge coal-fired power plant as a rooftop solar system! The amendment to schedule 2 of the ERA means that this cap has now been lifted – which is great news for large energy consumers in South Africa.

What does the new Electricity Regulation Act Schedule 2 Amendment say?

In short, this amendment exempts certain activities from licencing and registration with the electricity regulator (Nersa). Such exemptions include:

  • Any generation facility without a connection to the grid
  • Any generation facility below 100 kW in size (provided it complies with standard connection codes);
  • Any generation facility with/without energy storage under 100 MW and either:
    • No wheeling;
    • A wheeling agreement (provided there’s a connection agreement between the generator and the transmitter of the power); or
    • No import or export on to the grid
  • Generation facilities that are used for demonstration purposes and will not be in operation for over 36 months
  • Existing generation facilities that were exempted from the requirement before the gazette need to register within 6 months, if it is compliant with the grid-code and connected to the grid.

This means that, essentially, electricity generation projects under 100 MW, whilst still needing to meet requisite grid-code compliance and normal permitting procedures, will not require a generation licence from Nersa.

This will mean that projects that have historically taken years to complete will now be able to be built much more quickly, thus providing private consumers of energy with power and alleviating South Africa’s electricity crisis. 

Are there still other permits required for electricity generation?

Yes, the relevant regulatory approvals are still required for self-generation. The main change under the new legislation is that projects between 1 – 100 MW will not require a Nersa generation licence, which are substantial and very complex licences to obtain. Historically, this meant that a project of 2 MW would require the same amount of paperwork as a large coal-generation facility (oven GW in size), and thus slowed the uptake of renewable energy quite dramatically. 

It’s important to note that the projects must still be registered with Nersa, in which the relevant grid approval documents and environmental approvals, amongst other documents, will be submitted. Nersa will review the documents over 60 business days before granting registration to the relevant projects.

If the client is part of the municipal grid network, they would still need to obtain the relevant permissions in order to self-generate. This is standard practice for all solar PV plants and is necessary to make sure that the municipality has oversight of how much their grid is likely to be loaded at a specific time. The capacity of the grid needs to be taken into consideration, and so weak grid areas are likely to remain constrained, regardless of legislation.

The gazetting of this ERA Schedule 2 amendment is incredibly positive and will make a big impact on the sentiment toward the Renewable Energy sector – both for the companies that supply renewable energy, as well as the large energy consumers.

What does the amendment say about energy storage? 

Whilst many large energy consumers choose to remain connected to the grid, as it allows the use of the cheapest form of energy at various times of the day (eg., solar during mid day, grid-supply during off-peak hours), there are increasing numbers of energy consumers that are using battery systems to supply them with power 24/7, which also prevents load shedding. The amendment includes energy storage provision – meaning that the licencing exemption applies to energy storage systems as well. 

Hybrid, “islandable” systems which act like on-grid systems, but automatically “island” during load-shedding, are also included in the provision. The opening of the self-generation threshold means that these islandable systems will be increasingly cost-effective, because larger solar PV systems can be built and their cheap power stored in batteries for dispatching during load shedding or the evenings. 

What is wheeling?

Wheeling is the transfer of energy from an independent power producer to a client via the grid. For our clients, this means that electricity can be generated in an area with lots of space and great solar resource, in order to supply an energy consumer that may not have the space or the solar resource available (such as our Amazon Wheeling project). Wheeling requires quite a few different licences, but the advantage of the generation threshold increase would mean that a Nersa generation licence would be one less piece of permitting required. 

Because of its affordability there is likely to be a great uptake of renewable energy with the ERA 2 amendment. We look forward to working with all relevant stakeholders to make this happen.

SOLA head of Project Development, Katherine Persson, visits a solar project.

What does a career in renewable energy look like if you’re a woman?

New SOLA executives lead the charge in a male-dominated industry

Whilst Women’s day in South Africa marks the historical contribution of women to ending Apartheid, it is also an opportunity to bring into public discourse the long way we have to go to reach gender equality. And it’s no different in the workplace – engineering is one of the most gender-unequal fields globally, and women are often sidelined and face multiple difficulties. However, as more women join and stay in the engineering profession, it paves the way for more diverse work cultures to thrive – so we asked some of our female executives to help us by giving an account of their experiences in the workplace so far. 

Getting started in renewable energy is often by chance, but it’s becoming increasingly easier to specialise in it from an earlier stage. “I got into renewable energy kind of by accident as one of the first jobs that came up when I left university was a role doing environmental studies for wind farms,” says Katherine Persson, Project Development Director at SOLA. “I’ve never really looked back since I started my career in renewable energy, it has always just seemed like a logical choice as it’s something that I enjoy doing and there has always been a need for my skills”.   

Robyn Moseley, Head of Operations and Maintenance at SOLA, agrees. “I was exposed to renewable energy concepts in my first job by chance, being given the task of looking into flywheel design, batteries, inverters and solar,” she remembers. “Once I started in the renewable energy industry I was hooked and never looked back”. 

“After my initial exposure to renewable energy, I signed up to do a Masters in renewable energy as I wanted to get to know more, but did not get into the business side until a couple of years later,” remembers Moseley.  Renewable energy courses used to be difficult to find, but now it’s becoming easier to go directly into renewable energy. “Renewable energy wasn’t ever punted to me as a career choice, so I’m super excited to see that entire University courses are now available, along with a growing industry that offers legitimate careers for people with lots of different education and skills backgrounds,” says Persson.

Despite both women creating thriving careers in Renewable Energy, it has not been without its challenges. It’s especially difficult to grow in a male-dominent environment where female mentors are rare. “There have not been many females which I have been able to utilise as mentors, so it has been a challenge to navigate and find ways of developing in the business, and work with my personality to find strengths and weaknesses to work on and grow.” says Moseley. 

Persson has had similar experiences. “I have worked hard to build my confidence working in male-dominated environments where I have sometimes suffered from a dash of ‘imposter syndrome’.  Over the years I’ve had hardly any exposure to working closely with females at executive level, which I think makes it even more challenging for women to learn and grow into these roles themselves.”

This, of course, is not helped by the microaggressions that many women face in a male-dominated environment, particularly how personal decisions are often judged in professional settings. “I face a lot of negativity about having a ‘demanding job’ when I have small children, although no-one asks about my husband’s ‘demanding job’, even though he also works full time,” sighs Persson. Moseley’s experience is similar. “I was once asked how my husband was going to eat for the week while I was away on site, or who takes care of my child when I am away,” she adds. These microaggressions can be exhausting to face on a daily basis, and add to the reasons that many female engineers leave the workforce. 

Then again, they are both extremely happy to have pursued careers in Renewable Energy. “The places I’ve travelled to for work, and the amazing people I’ve met, are definitely career highlights for me,” says Persson. “Being involved in Renewable Energy has allowed me to visit many interesting countries, such as Jordan and Rwanda, and I’ve kept in contact with many people throughout my career and made many friends,” adds Moseley.

There can be no doubt that the Renewable Energy industry, like most engineering-heavy sectors, have a long way to go in terms of creating equitable workplaces. Both Persson and Moseley agree that the sector has a long way to go, although green shoots are starting to appear, making the environment friendlier for women. To women seeking to enter into the renewable energy profession, Persson offers the following tips:

  • Although there are lots of engineering positions in renewable energy, don’t be tricked by thinking that it is only for engineers: our industry needs environmental scientists, social specialists, finance experts, logistics experts, lawyers, marketing experts, HR managers, etc. There is a space here for everyone to find their own flavour of ‘technical’.  
  • Be ready to learn, and learn fast. The demands of the renewable energy industry are changing all the time.   
  • Find a mentor – someone that can help guide and support you along the way. 
  • Groups of women in similar industries – such as WE Connect for women in renewable energy in South Africa – are also great sources of support.

“The renewable energy industry is vast and still growing.  There are many facets to the business and opportunities are there for any profession to thrive.  If you are willing to learn, dive in and be able to keep up with a fast-paced environment, renewables is for you,” echoes Moseley.

Are you still studying, but interested in pursuing a career in renewable energy? If you’re currently pursuing your BEng or BSc Eng in Electrical Engineering, you could qualify for SOLA’s engineering bursary. Click here to read more!

If you are currently working in renewable energy, have a look at our careers page for any vacancies we currently have available.

The definitive guide to solar PPAs

There’s been growing interest in solar PPAs over the past few years, and they are now much more mainstream. However, you may still have some questions about PPAs and solar finance. What are PPAs, and how can they benefit your business? We’ve put together a definitive guide to help. 

What is a solar PPA?

The term “PPA” is swung around quite a lot in the solar industry. PPA stands for “Power Purchase Agreement”, and it signifies a type of contract between an electricity generator (or Independent Power Producer – IPP) and an electricity consumer (or offtaker) – such as a commercial operation. A solar PPA is therefore a contract between a solar generator and an offtaker, stating that the generator will provide solar power and the offtaker will buy the solar power from them.

As a form of electricity, Solar PV is an easily-deployable, very safe option without any moving parts that produces electricity during light hours of the day, and therefore it often makes sense to embed the solar PV system directly into the factory, retail centre, warehouse, etc. where it will be consumed. As such, many commercial and industrial solar PPAs include the construction of an embedded generation solar facility on the site where the power will be used. In this instance, a solar PPA is a way for the customer to procure clean electricity and save on their electricity bills without deploying any CapEx, and only paying for the electricity that the system generates.

However, PPAs can also be entered into for clients where there is either too little space or too much energy demand to generate solar electricity directly on the site. In these situations, solar wheeling agreements can be entered into, which allow the purchase of solar power from a remote solar facility, such as a large solar farm, to be “wheeled” through the electricity grid and to the customer. Wheeling typically suits energy-intensive operations such as mines, smelters, data centres, and other large commercial operations.

Typically, the larger the size of the PV system, the lower the tariff. This is why solar PPAs are best suited to energy-intensive operations, where there is little chance of exporting excess energy. The most suitable size of the PV system depends on the client and type of operation, and is typically determined during a detailed feasibility process between the generator and offtaker. 

What are the benefits of a solar PPA?

There are several benefits of entering into a solar PPA, but they can be summarised into four main points:

  1. Cost saving

The major reason for entering into a solar PPA is the significant cost saving that customers tend to encounter. While grid tariffs have been increasing, the cost of solar PV components has reduced dramatically over the past 10 years, meaning that the cost per kWh of solar electricity tends to be much cheaper than power from the grid and other forms of onsite generation (diesel genset etc.). In addition, the solar PPA tariff includes all expenses relating to the solar system: upfront installation costs, part replacement, comprehensive asset insurance and ongoing operations and maintenance, meaning that the client will not have any hidden or unexpected costs over the life of the PPA.

  1. Carbon emissions reduction

Solar PV systems generate energy by converting the sun’s rays directly into electricity, forming a low-carbon, renewable energy source. A solar PPA is an easily accessible way for businesses to decrease their carbon footprint and meet their sustainability targets. 

  1. No outlay of CapEx or ongoing maintenance costs

If a customer wishes to procure their embedded solar PV facility outright, they will need to pay a supplier for the engineering, procurement and construction (EPC) of the project, which will have a large capital outlay. This is not always the best option for a business whose core operations are completely different to electricity generation, as the ongoing maintenance and performance of the plant will be their responsibility to manage. Whilst most EPC companies provide additional Operations and Maintenance services, it will be the responsibility of the client to ensure that those contracts are fully up to date and to log any issues with the service provider. 

  1. Future electricity cost perspective

Typically PPAs will have fixed tariff increases baked into the contract, ensuring that the future costs of electricity will be predictable and manageable. Historically, Eskom tariffs have risen an average of over 11% annually over the last 20 years, with a 15% increase announced in 2021. A solar PPA will have an escalation that is fixed and typically well below Eskom’s average and can be set in consultation with the client. 

How long is a solar PPA?

The main component of solar PV systems are the solar panels, with a market standard performance warranty of minimum 25 years. As such, typical PPAs range from 10 – 25 years. Although the length of the PPA is adaptable, the longer the PPA is, the lower the starting tariff will be. 

If your business is looking to procure sustainable power quickly, then the time of procurement should also be taken into consideration. For a simple solar PPA to take effect, there is typically a 5 – 6 month procurement time before the site establishment and construction, which incorporates the negotiation and signing of the commercial PPA as well as the design and licensing of the solar PV system. Here’s an example of the typical timeline of a solar PPA negotiation period:

Off-site PPAs that include a wheeling agreement may take longer to initiate because a solar generating site needs to be identified and permitted in addition to the normal PPA process. 

What’s the difference between a solar PPA and a solar lease?

Over the years, the terms “solar PPA”, “solar finance”, and “solar lease” have come to be used interchangeably, so what is the actual difference between these terms? The answer has to do with the history of energy legislation in South Africa and the allocation of risk.

Before November 2017, it was not possible in South Africa for Independent Power Producers to sell energy directly to consumers without a generation licence. As such, solar leases were utilised as a way for a private energy consumer to make use of a solar PV system by leasing the system instead of paying per unit of electricity the system generates. Then, in November 2017, an amendment to Schedule 2 of the Electricity Regulation Act allowed for private energy sale without the need for generation licence of projects less than a 1MW in size, which opened up the opportunity for Power Purchase Agreements to take effect. 

So the main difference between a solar lease and a solar PPA is contractual, and dependent on where the performance risk of the asset lies. In a solar lease, the performance risk lies with the customer or user of the solar PV system as they pay a fixed monthly fee for the system not linked to the output it generates. Whereas in a solar PPA the entire risk of the asset lies with the solar PV operator as only energy generated is paid for on a take-or-pay basis, making it a purely cost-saving mechanism for businesses.

Are there risks associated with a solar PPA?

As with any large commercial decision, the risks need to be understood up front. The main risks in entering into a PPA agreement include:

  1. The length of the contract

Whilst most business contracts are typically renewed on an annual basis, a PPA term is typically 10 years and longer to ensure the most cost effective solar tariff. As such, senior management will want to ensure that the cost and carbon savings associated with procuring clean electricity are worth the risk of entering into such a contract. This can be mitigated through various exit options including an option to purchase the system, which can be a condition of PPAs that allows the client to buy the solar PV system after a set amount of time for a periodic price that is agreed upfront, should the operational requirements of the business change.

  1. Changing operational requirements

The risk of changes to the business’ operational requirements is a standard business risk that should be considered for every new venture and/or product that is introduced, as it will have an impact on the overall efficacy of the plant or operation. If, for example, a product is no longer required and its manufacturing operation suddenly starts to use less electricity, this could impact on the cost-saving aspects of the PPA. Most PPAs are arranged on a “take-or-pay” basis, meaning that the client is responsible for paying for all the electricity that the system generates, including instances where the customer cannot take the energy not at the fault of the generator. In addition to careful business management, this risk is also mitigated through careful feasibility and design phases, which look in detail at the electricity requirements of the building or facility before suggesting the total size of the solar PV system to the client. Similarly, a PPA has a fixed tariff increase each year, meaning that electricity costs will be very predictable into the future, allowing for better business planning. 

Is a solar PPA right for my company?

Understanding if a solar PPA is the right option for your company is a decision that comes down to business management decisions around cost saving and sustainability. On cost saving, does your business have energy-intensive operation(s) around South Africa, and is a large amount of your company’s operational budget spent on electricity procurement? If so, a solar PPA is a great way to reduce electricity costs quickly, with low risk to the business, improving the profitability of your operations. Similarly, a PPA also ensures that future electricity costs are predictable, hedging against unpredictable Eskom increases.  

From a sustainability perspective, does your business have sustainability targets that require a reduction in carbon emissions or a requirement to procure renewable energy? If so, a solar PPA is a great capex-free way to reduce reliance on grid-supplied electricity, which in South Africa is highly carbon-intensive. For example, the CO2eq for South Africa’s grid is just under 1 kg per kWh, whilst solar is less than 0.01kg per kWh. From a procurement perspective, solar PV is considered 100% renewable, so the more solar PV that fuels your operation, the closer you will be to your renewable energy procurement target.

Is installing embedded solar PV in new property developments worthwhile?

Embedded solar PV generation is often retrofitted in industrial buildings due to its immense cost and carbon benefits. However, new buildings and greenfield property developments stand to benefit greatly from incorporating solar PV into their designs as well. 

According to the International Renewable Energy Agency (IRENA), the costs of solar PV modules have fallen over 90% since the end of 2009, and energy storage components show similar trends. This translates to power systems that are increasingly affordable to integrate into new developments – particularly in sunny countries like South Africa.

So is it worthwhile to integrate solar PV into the design and construction of new buildings and property developments? Absolutely. In fact, according to Architizer, a leading architecture website, incorporating PV into building design is becoming increasingly popular as the options for mounting solar modules and integrating PV into building design expand.

Installing embedded solar PV on new property developments has a host of benefits:

  • Understanding the electricity load and how large the solar PV system will be upfront helps to integrate it into the building design, ensuring that it is aesthetically pleasing and/or seamless with the architect’s vision.
  • Incorporating solar PV modules into the roof design ensures that the roof can bear the weight and prevents the need to strengthen the roof at a later date
  • Inverter or battery rooms can be incorporated into the building design, which will keep them cool and dry, allowing them to function optimally and saving maintenance costs 
  • Solar PV is much cheaper than other forms of energy, so it makes the building costs more cost efficient from the start
  • Incorporating solar PV and/or energy storage into a new development can shield it from load shedding, making the property more attractive to tenants 

Integrating solar PV design into greenfield developments has become an obvious choice because it is one of the cheapest and most reliable forms of electricity available today. Several new developments are exploiting that: DSV Park opted to implement a large-scale solar PV system into their new 140,000 m² logistics facility, incorporating a 1.3 MWp solar PV system integrated into the Park’s electricity supply, alongside on-site diesel generators that allow it to safely operate during load shedding events. 


With alarming increases in electricity tariffs and grid unpredictability and load shedding in South Africa, many like DSV are opting for cleaner power supply. Solar PV systems last 25 years, so incorporating them into building electrical design is a way of ensuring that the assets have a stable power supply way into the future.

New report shows that job creation in the PV sector is inevitable

In the most conservative case, we’re looking at over 30 000 jobs created per year in the solar PV industry 

Job creation is one of the most important considerations for the South African economy. Sitting at around 29%, unemployment is a serious hindrance to the South African economy. The creation of solar PV systems for the government and private clients brings down costs and increases energy reliability, bolstering profitability and growing businesses. However, the question of how many jobs the PV industry creates has been a hot topic for several years. 

A new study, completed by the CSIR and commissioned by the South African Photovoltaic Industry Association (SAPVIA) with sponsorship from SOLA, has set out to look at just how many jobs solar PV has created in South Africa so far, and what we can expect from the industry in the future. 

Measuring jobs in the PV sector is tricky, because of the variability of jobs throughout the life-cycle of each plant. Typically, both large-scale and embedded generation plants will have quite a lot of employment during the construction phase, which taper off when the plant goes into Operation & Maintenance (O&M). However, these jobs last the lifetime of the plant, and thus are cumulative over time. 

How are solar jobs measured?


There’s been much discussion about how to measure jobs in the solar PV sector,  which has not had a unified approach or metric, resulting in confusion about the numbers of jobs created by the industry. As such, the first step in the research was coming up with a useful way to measure jobs, particularly those in the solar PV sector that tend to undulate based on construction times. 

Based on an international literature review and experiences in other survey approaches, the CSIR used “Full Time Equivalent” (FTE) as a metric to measure jobs. A FTE job looks at the amount of time that a worker spends at a job compared to a full time employee. For example, if an employee only works half-time, their FTE score would be 0.5. As a result, the metrics represented by FTE show what the equivalent full-time employment would be per annum for a particular job.

In addition, the CSIR used a standardised unit output of MW per annum in order to be able to compare jobs across the value chain. As such, the jobs in the analysis and in the future scenario modelling are represented FTE jobs per MW per annum. This allows the job statistics to be comparable across different sectors and in relation to other forms of employment creation, and takes a conservative view on estimating jobs.

The predicted scenarios for job creation in the solar PV industry in South Africa

The report looked at historical data in order to create a model to predict future employment scenarios in the sector. It modelled three different scenarios, the IRP 2019 scenario, the accelerated case scenario, and the high road scenario.

  1. The IRP 2019 scenario

This scenario looks purely at the jobs resulting from the Integrated Resources Plan 2019 by the South African Department of Mineral Resources and Energy. In this scenario, the solar PV industry would create between 33 000 – 35 000 jobs per year from 2022 and 2030, but there would be little consistency and large variations between years. 

  1. The accelerated scenario

This scenario takes into consideration the growth of the market outside of the IRP guidelines, and assumes that utility scale solar PV will be built in addition to embedded generation, owing to the government’s intention to allow more embedded generation to plug the energy supply gap in the short term. In this scenario, an initial spike in job creation of 51 580 FTE jobs will be created during 2022, followed by a dip back to 31 131 FTE jobs in 2023 and climbing to consistently to 37 975 jobs by 2030

  1. The high-road scenario

In this scenario, the predicted import of solar modules is expected to increase, in addition to the building of both Utility and embedded generation solar PV facilities, which continue to grow post-2022. In this scenario, jobs are expected to bounce up in 2022 to 53 422 FTE jobs, and return to 33 972 in 2023, growing steadily to 39 817 FTE jobs in 2030.

What does this mean for the sector?

The jobs report paints a picture of what the expected job creation trajectories will look like. The research highlights the fact that the halting of renewable energy procurement in 2015 was devastating to the jobs in the sector, but has not prevented it from recovering in the recent years. There are some important aspects to consider in order to ensure the maximum job creation:

  • O&M jobs are the most sustainable, as they run throughout the lifetime of each PV facility (usually around 20 – 25 years). They have the potential to create substantial, lasting job opportunities in the sector.
  • Localising PV component manufacturing could have a significant effect on the growth of PV-sector jobs in South Africa, particularly if there is a clear path to how much the sector will grow each year.
  • The embedded generation market is a very important player in the creation of PV jobs, but has been hindered by policy uncertainty. 

Overall, the report shows that whichever scenario ends up playing out, there is likely to be significant growth of solar PV jobs in the coming years. 

Download the full report here.

Interested in working for us? Have a look at our careers page for possible vacancies.

Energy Wheeling supplies power to areas located away from the direct source of power

SOLA gets approval for largest solar PV wheeling agreement in South Africa

A flagship renewable energy project, commissioned by Amazon, is set to demonstrate the flexibility and convenience of procuring independent power through the electricity grid. The project will see 28 GWh of solar energy wheeled via Eskom’s utility grid from a solar farm in the Northern Cape to Amazon’s facilities each year.

Energy wheeling holds tremendous value in that it enables the supply of energy to urban areas from energy projects in outlying areas, such as a solar farm located in an area where the sun is most powerful and consistent. This is done through the transfer of electrical power via a utility’s distribution system. In other words, the power generated in a sunny area is distributed to an offtaker where there might be less solar resource. 

Chris Haw, SOLA’s Executive Director, explains that although the concept of wheeling energy using Eskom’s existing infrastructure has been in place since 2008, certain administrative barriers have hindered the uptake of such services. “This project, which comprises a 10 MW solar PV farm, has also received a sought-after generation license from NERSA, a milestone that other similar projects have struggled to achieve.”

SOLA will be responsible for developing the project and will build, own and operate the solar facility.

Haw explains that the NERSA process requires a signed Power Purchase Agreement and fully developed project in order to obtain approval. “This creates contractual challenges because many inputs, such as the foreign exchange rate, are still fluctuating whilst the application process is underway. The high standard of development required for submission means that NERSA are not handing out licenses to projects that won’t proceed, which is a very good thing.” 

The project aligns with the South African Government’s intent to open the electricity grid, allowing independent generators of electricity and consumers to enter into bilateral agreements to optimise the cost and sustainability of energy, which has previously been difficult to achieve. The generation license received from NERSA is one of the first granted as part of the recent allocation made for distributed electricity generation in order to plug the short-term capacity gap.

Haw says that SOLA will deliver the energy via the Transmission Network though a Wheeling Use-of-System agreement. “This Wheeling Use of System Agreement is the first of its kind and the largest solar PV wheeling arrangement in South Africa to date.”

Haw credits the company’s multi-disciplined skillset and 10-year track record of developing, financing and building solar PV projects in South Africa with overcoming the many challenges that were faced.

The SOLA Group has a history of breaking down barriers to enable renewable energy projects in South Africa. The group developed some of the county’s first IPP projects, signed the first bi-directional metering agreements with municipalities, and are responsible for innovative solar-plus-storage projects like the microgrid currently powering Robben Island.

The project will be majority black South African-owned, demonstrating a pivotal dedication to transformation in South Africa’s energy sector. Mahlako a Phahla Investments, a black women-owned and operated energy and infrastructure investment holding company will own 45% of the project.

Other investors into the project include African Infrastructure Investment Managers (AIIM), through the IDEAS Fund, one of South Africa’s largest domestic infrastructure equity funds and one of the largest investors in the country’s renewable energy landscape.

The project’s success could mean that more companies like Amazon will look to procure cleaner independent power through the grid.

“This project is the tip of the iceberg in terms of what the electricity picture in South Africa could look like,” says Haw. “Projects like this demonstrate the potential of a truly modernized electricity market where consumers can procure cleaner energy through state-owned grid lines whilst paying for their upkeep in the process,” he adds.

The project will begin construction in early 2021.

South Africa electricity grid supply

The great opportunity to reform South Africa’s power sector

Over the past few weeks, there has been encouraging movement in South Africa’s electricity sector that indicates a gradual opening of the electricity market. NERSA recently confirmed that licensing of electricity generation over 1 MW will be allowed without ministerial sign-off, which could make the processing of renewable energy generation licences more efficient; and municipalities were recently granted the freedom to procure their own power. In addition, the prospect of the renewable energy bid window 5 (REIPPP 5) opening in December indicates that South Africa is starting to take the procurement of renewable electricity seriously. 

And whilst renewables still make up a small share of South Africa’s total generation capacity, the growing cost gap between the grid and solar, along with falling battery prices, means that South African electricity consumers are faced with something new in the context of our traditionally monopolistic electricity market: choice.

As was discussed in our previous piece on going off grid, it is clear that many consumers are choosing to go entirely off grid. However, mass grid defection is not necessarily the most optimal system for the majority of South African consumers. If the government suppresses private and distributed electricity generation, forcing customers to choose between staying on grid with expensive, unreliable power, and quitting the grid entirely, there may be large-scale grid defection as businesses choose to forego the unreliable and expensive grid. This will erode both Eskom and municipal revenue streams, driving more tariff increases that impact many South Africans

However, effective grid modernisation will turn potential defectors into ‘prosumers’, who choose to remain grid-connected and participate in a more open and mutually-beneficial electricity market. There are already some municipalities in South Africa that allow for grid feed-in (see this convenient list), which helps grid-tied solar PV systems become more profitable. However, we’re still a long way from a mature electricity market, where the cheapest electricity can be generated and consumed when it is required, enabling overall cost reductions of electricity. 

A modern grid will make use of enhanced infrastructure for better management of variable renewable energy, and ensure equitable electricity pricing that allows consumers to generate their own electricity and/or buy electricity from independent power producers whilst paying fees to utilise the electrical grid. This could generate new revenue that would enable better maintenance of the existing infrastructure, further replacing outages. 

However, we are still a way off from this “modern grid” idea. Some of the immediate steps that could be taken to enable grid modernisation, preventing mass defection and price increases, could include:

  • Laws and standards must be updated to cater for all technologies in the energy mix. 
    • We’re starting to see some progress on this, but there is still a fair way to go, according to Anton Eberhard:

  • Grid operators should be assisted with tariff modernisation
  • Arbitrary size restrictions on embedded generators should be reset based on rational technical and cost considerations. 
  • Permitting and licencing authorities must be held to their mandates and assisted and upskilled where needed.

If we can ensure that these factors are considered, there will be a hopeful outlook for South Africa’s electricity future. The alternative picture is not as sunny, as our power system could devolve into something undesirable for businesses and inequitable for South African citizens. 

Is it possible for your business to go off-grid?

A question many businesses are asking in 2020, particularly with the onslaught of load shedding, is the possibility of going entirely off grid. This is unsurprising – grid reliability has been severely reduced over the past few years and Eskom tariffs are substantially higher than the costs of solar on an average lifetime basis. As such, many companies are looking at the possibility of severing ties with the grid and managing their energy needs independently.

Historically, solar has not been viable as an alternative primary electricity supply to the grid primarily because of its variability. Because the sun only shines during the day, the deployment of solar has often been limited to partial offset of daytime electricity demand – a solution which tends to save companies significantly on their electricity bill. But for solar to be a ‘dispatchable’, 24-hour alternative to the grid, it needs to be coupled with storage, or with other flexible sources of demand or generation, which has often made it an expensive choice.

This, however, is changing. In South Africa, overall costs of solar-plus-storage have historically compared unfavourably to most grid tariffs, limiting off-grid projects to areas with no grid access or grid capacity constraints. However, there are already several industrial and commercial grid tariff structures that make off-grid solutions a cheaper and more reliable alternative than remaining on grid, particularly for industrial operations that have high power requirements and tend to supplement their supply frequently with diesel generators to keep their electricity supply consistent.

How do you know if it is viable for your company to go off grid? One of the key questions to ask is how much your business currently relies on diesel generators. If you use them around 15 – 20% of the time, it is almost certain that a solar + storage solution will save your business money. Secondly, if your facility has large power (kVA) requirements and is on a high industrial tariff, the business case of going off grid could be advantageous.

Cost reductions and improved efficiency in energy storage technology have major implications for the future of South Africa’s power system: it means that some electricity consumers on expensive tariff structures can already choose an alternative to Eskom or their local municipality. Even those on cheaper tariffs are likely to follow as grid tariffs rise and solar and battery equipment gets cheaper.

Of course, large-scale grid defection might not be the ideal outcome for all South Africans. It will erode the economies of the national grid and increase costs for many segments of society. This is why power sector reform must urgently facilitate an efficient and equitable transition to renewable energy.

How new methods of procuring solar electricity enable more access to affordable power

Intuitively, solar-generated electricity is cheap: the sun, after all, is a free resource, and compared to fossil-based energy such as coal and gas that require constant inputs, once installed, solar PV systems harness the sun’s energy for “free”, providing years of clean energy. So why has solar taken a while to become mainstream?

This is, in part, due to the costs of setting up a solar PV system. Because whilst the solar resource itself is free, there is still an initial cost of setting up the equipment which harnesses the sun. And while electricity grid tariffs are typically made up of ‘pay-as-you-go’ charges for monthly energy and power use, a solar PV electricity generator requires an upfront investment in equipment, which is then followed by minimal operational costs and zero fuel costs. This means that whilst the overall lifetime costs of solar PV are significantly lower than equivalent grid costs, the upfront investment has historically often exceeded the available capital of electricity consumers seeking alternatives.

However, this pattern is changing. For years, businesses with sensitive balance sheets that would not have cause to justify a large capex expenditure on an asset that doesn’t relate to their core business have struggled to justify the costs of a solar PV system – even if it would result in significant cost reductions over time. For this reason, new ways of procuring solar electricity have grown, and many businesses are now choosing to buy power from independent power producers (IPPs) who own and finance the solar assets on their behalf. 

Independent Power Producers (IPPs) gained some traction in the years of South Africa’s Renewable Energy Independent Power Producer Procurement Programme (REIPPP), which started in 2008 to see the first renewable energy integrated on to the main grid. Since 2008 a few trustworthy IPPs have stood the test of time and are able to provide Power Purchase Agreements (PPAs) that reliably smooth out the costs of a solar PV generator, making it more affordable and accessible to businesses. In addition, their owning of the solar PV asset removes the technical and operational risks that a business might face through ownership.

Several years ago, small-scale PPA agreements for typical businesses were inflexible and difficult to structure. As mentioned in the previous piece on how energy generation has changed, lower grid tariffs and higher solar equipment costs in the past reduced the financial benefit of solar for the end user. In addition to this, local solar companies were less experienced and technical risks were higher, increasing the costs of finance. Buying solar power from an IPP was akin to renting a house at above market rates, from a landlord who overpaid for the property and got an expensive bond from their bank.

But this has been fundamentally changed by the cost dynamics of the energy sector. Reputable IPPs now have the skills and experience to offer clean solar power at a substantial discount relative to the grid, even for commercial energy consumers. In addition to unlocking greater overall savings, the growing cost gap is enhancing the commercial flexibility of IPP services, and making solar electricity available to a wider pool of consumers. 
A typical PPA can now range from 5-20 years, with the most popular being somewhere around the 10 – 15 year mark. During that time, the offtaker (the company buying the power) and the IPP (the company providing the power), agree to pay for power and provide power, respectively, at an agreed tariff. It’s very similar to buying power from Eskom, except that the companies know upfront how much they’ll be spending on power – and how much that tariff will increase in the coming years. These solar procurement options enable customers with sensitive balance sheets to reduce costs immediately, without the risks of owning or running a solar PV system, and without the risks of unpredictable tariff increases over time.