A Memorandum of Understanding (MoU), signed by the South African Photovoltaic Industry Association (SAPVIA) and the South African Property Association (SAPOA), will see the two organizations collaborate on the use of solar PV in improving energy security in the commercial and industrial property sectors. The aim of the MoU is to facilitate the installation of solar PV systems on roof-tops at shopping malls, as well as office and industrial parks around South Africa.
SAPOA represents the commercial and industrial property industry in South Africa, and SAPVIA, promotes the development of the country’s solar PV sector. A Coordinating Committee, consisting of representatives from both SAPOA and SAPVIA, will oversee the implementation of the MoU.
Business responds to unreliable power supply
The MoU is a major step forward for businesses in South Africa since they are forced to conduct operations with an unreliable power supply. The economy is expected to take a serious beating as the country grapples with its worst power outages in seven years because of a surging demand for electricity. There is also currently an upward trend in the price of electricity generated from traditional sources, compared with the downward trajectory of solar PV-based electricity.
The state-owned power firm Eskom has been struggling to keep the lights on since November last year with consumer demand overtaking supply levels.Eskom began load shedding in 2008 in response to its poor infrastructure which has battled to meet a growing demand since 1994. Government was warned as far back as 1998 about a possible system collapse in a policy document presented to parliament. But it was only in 2007 that work began at Medupi, in the northeast, to build the country's first new power station in 20 years.
The first unit of the 4,764MW facility was initially expected to deliver power in 2012, but numerous delays have since pushed that deadline to June this year.
Load shedding-devastating for business
In order to relieve the pressure on the grid, Eskom has told heavy industry to reduce consumption by at least 10%. Henk Langenhoven, chief economist for a federation representing the energy-intensive steel and engineering industries estimated that electricity disruptions could slash production by 23%.
With an economy heavily dependent on gold and platinum mining, the central bank last month revised its 2015 growth forecast down from 2.5% to 2.2% - specifically pointing at the country's electricity problem.
The potential impacts that load shedding will have on business, business confidence and consumers alike is inestimable, says South African Chamber of Commerce and Industry chief Vusi Khumalo.
Economist Loane Sharp of the Free Market Foundation think tank says that as long as the power crisis remains, the country will struggle to grow and prosper.
Innovation in decentralized energy generation
While the use of solar PV solutions in the commercial and industrial sectors has seen a marked increase recently, the agreement between SAPOA and SAPVIA offers a unique opportunity for these solutions to be scaled up.
Neil Gopal, SAPOA’s Chief Executive Officer said: “Given the current energy constraints in the country we welcome this and any such initiatives to address the challenges facing South Africa.”
Moeketsi Thobela, SAPVIA’s CEO, concurred: “This builds on a number of initiatives that have seen embedded PV generation capacity increase rapidly from 10MW to more than 30MW. The synergies represented by this agreement are enormous, including the fact that both the demand from SAPOA members’ property portfolios and solar PV generation tend to peak during the day.”
Over time, the increase in the adoption of solar PV solutions by businesses will see a boost in innovative decentralized energy generation solutions. Similar positive effects on skills, local manufacturing of PV components and enterprise development are also to be expected. These effects will be realized through business-to-business interactions among the associations’ members and their commercial partners, as well as information-sharing.
In the long-term, the installation of PV systems also puts a sustainable and environmentally-friendly “ceiling” on electricity price increases.