How much it will cost you to say “Goodbye Eskom”
Eskom load shedding is here to stay, and electricity prices in South Africa are expected to increase significantly. Here is how much it will cost to quit Eskom
Eskom CEO Tshediso Matona said in December 2014 that load shedding was here to stay, with the utility battling an extremely constrained power system.
Energy expert Chris Yelland added that Eskom’s maintenance backlog will “take several years to address.”
Apart from dealing with power outages, South Africans can also expect big electricity price increases in the coming years.
Matona said in January 2015 that Eskom’s operational strain had put stress on its books, and that it needed to raise tariffs to recover some of its operating costs.
With the prospects of an unstable electricity supply and high prices, many people are looking at alternatives to Eskom.
Solar power to the rescue
Overall, South Africa has good weather. Apart from making it a great country for sport, braais, and going to the beach, it offers an excellent environment for solar power.
The price of solar power has plummeted in recent years. Tobias Bischof-Niemz, energy engineer at the CSIR, said that five years ago a photovoltaic system cost R5 per kWh, compared to Eskom’s R0.50 per kWh.
Today a photovoltaic system produces power at less than R1 per kWh, while Eskom charges much more than that.
The wider availability and lower costs of photovoltaic systems means that many people are using solar energy to either supplement Eskom power (grid-tied system), or go completely off the grid.
This raises the question as to what the costs are to produce enough electricity to become completely Eskom free.
Solar system for a large house
According to Finweek, a solar system which provides power to most appliances in a large house – excluding a geyser and heater – will cost around R233,000.
This system includes 24 solar panels, a battery bank, inverters, cabling, and installation costs.
The following infographic provides an overview of the cost of this setup. It should be noted that the cost of gas equipment, which is typically used in combination with such a system, is not included.
Real-life example: Big family home completely off the grid
Inus Dreckmeyr built a large family home which is completely off the grid. In an interview with Carte Blanche, he said that he usually gathers enough electricity for his house by 11:00 in the morning.
One of the reasons for the efficiency of his setup is that the solar panel array tracks the sun, which increases yield by 40%.
The house runs several appliances, including multiple fridges, televisions, entertainment centres, and the security system.
He uses gas and a wood stove for cooking and heating water, and saves electricity by using low-wattage LED lights.
The full cost of the system is around R350,000. However, the batteries need to be replaced every 10 years, which costs around R150,000.
Many energy experts advise that people do not go completely off the gird, but rather use a combination of Eskom and solar power – aka a “grid-tied system”.
The cost of such a system for a standard family home, said energy expert Henning Holm, is between R120,000 and R150,000.
Solar power makes financial sense
Geoff Vickerstaff from Plan My Power said that even at a cost of over R200,000 per household, you will save money in the long run.
“If you are to amortise the capital amount over 20 years, the cost is around R2,000 per month,” he said.
“Taking into account your current electricity bills and the planned Eskom price increases, you would be cash flow positive by year 5, and you would come out at a huge monthly saving by the end of year 20.”
Holm agrees. “If you calculate the electricity cost over its lifespan [of a grid-tied system], it is around 80c per kWh. This is much lower than the current Eskom rate of around R1.40,” he said.