"The price of PV coming down so quickly - the ceiling price for electricity is getting lower and lower. It is critical for municipalities to understand how this will impact their revenues."

Published: Fri 21 Feb 2014
A blog entry by Annemarie Roodbol

Contributed by:

Annemarie Roodbol
Senior Communications Manager

Annemarie Roodbol's Blog

 Exclusive interview with Mike Mulcahy, project manager at provincial development agency Green Cape and speaker at the upcoming Clean Power Africa in Cape Town from 13-14 May.

1)  Let’s start with the basics, what is PV solar?
One of the technologies that can convert sunlight into electricity. 

2)  How important is PV solar in South Africa’s journey towards becoming a more renewable economy?
PV is very important to South Africa's renewable energy path. Along with wind it is seen as the biggest contributors of the RE technologies, this is evidenced in the integrated resource plan.  There is already significant manufacturing that has been established in South Africa to provide the panels and inverters to the South African REIPPP program.

3)  Can you give some examples of success stories or case studies?
The REIPPPP (Renewable energy independent power producer procurement programme) has seen over 30 PV projects under development in South Africa. While some of these projects are already grid connected, others are in the process of reaching financial close. These projects represent over 1000 MW of power from PV. It is expected that the rollout of PV will continue at the rate of about 1GW per year.

4)  What are the challenges when it comes to solar?
Integrating solar at a domestic level has been a challenge in the South African context. This distributed, embedded generation offer opportunities for small users to reduce their consumption. In South Africa, municipalities use electricity revenue as a backbone to the budget - there is a fear that decreased consumption will lead to decreased municipal revenue, and herein lies the problem.

5)  What is your vision for PV solar in South Africa and Africa?
PV has the opportunity (With the current price trajectory) to be the  major provider of electricity in Africa. PV will always need an associated technology to provide power at night, and at time when it cannot produce enough, but we have already seen PV being used in conjunction with generators in a hybrid system.

6)  What surprises you about this sector?
The biggest surprise is how quickly the price has come down in South Africa. From R2.75 per kwh in the 1st round right down to well under R1 per kwh in the third round. This has put PV in the position where it is directly competitive with 'new build coal' at Medupi. This leaves the country in a situation where renewable energy is starting to show real price competitiveness with the traditional electricity sources.

7)  Your presentation at Clean Power Africa is titled:  PV at municipal level - challenges and benefits.  What will be your message at Clean Power Africa?
The message is that with the price of PV is coming down so quickly - the ceiling price for electricity is getting lower and lower. It is critical for municipalities to understand how this will impact their revenues, and how they can encourage a planned structured roll-out over the next few years.

For more info on Clean Power Africa go to:  www.clean-power-africa.com