Browsing by Author "Korsten, Nikkie"

Now showing 1 - 1 of 1
  • Thumbnail Image
    Item
    An investigation into the financial impact of residential Rooftop PV on Stellenbosch Municipality
    (Stellenbosch : Stellenbosch University, 2016-03) Korsten, Nikkie; Sebitosi, Ben; Brent, Alan C.; Stellenbosch University. Faculty of Economic and Management Sciences. School of Public Leadership.
    ENGLISH SUMMARY : Worldwide, electricity utilities are recognising and responding to the threat that a large uptake of rooftop photovoltaic (PV) solar installations might have on their traditional business model, based on volumetric sales. Likewise, in South Africa there is a concern that the trend of households investing in rooftop PV might have significant impact on the business model of electricity delivery services by Eskom and local governments. Since South African municipalities are responsible for managing electricity distribution, they face similar challenges to traditional energy utilities across the world. Historically, South African municipalities served as local distributors of electricity and many municipalities relied on the revenue generated from electricity sales to cross-subsidise other services that were underfunded. If the number of rooftop PV installations continues to rise in South Africa, this might have a negative impact on the financial balance of South African municipalities. This research investigates the financial impact that increasing installations of gridconnected rooftop PV at a household level might have on local governments, using Stellenbosch Municipality as a case study. An extreme-case scenario approach is used to measure the financial impact. Assumed in this scenario is that the absolute maximum of installed embedded generated electricity, as set by NRS standard, will be channeled back to the grid by households. The NRS standard provides a guide as to how much maximum installed embedded generated electricity can be fed to the grid before an in-depth grid study needs to be conducted. The research looks specifically at the residential areas in Stellenbosch with high electricity use, determined by an examination of the electricity use in the different suburbs. Moreover, criteria are set to determine which households from these high electricity use suburbs may be regarded as potential investors in solar rooftop PV. If these criteria are applied, it means 541 households could (each) potentially connect a 3 kWp rooftop PV system. This leads to an annual reduction of approximately ZAR 1.3 million in the municipality’s expenditure for the electricity supply from Eskom. It also leads to a loss in income of ZAR 3.7 million by the municipality as a result of electricity sales reduction, resulting in a net loss of ZAR 2.4 million. The net loss would be equivalent to a 0.6% financial reduction on the total electricity revenue of ZAR 413.7 million for the municipal financial year 2013/2014. If the maximum grid capacity approach were practised, this would mean 2 255 households would be able to connect a 3 kWp solar system to the grid. This would result in a loss in income of ZAR 15.3 million and a saving of ZAR 5.5 million. The net loss would be ZAR 9.8 million, which would be equivalent to a 2.4% reduction on the total electricity revenue of ZAR 413.7 million for the municipal financial year 2013/2014.