Capetonians generate over R25m from cash-for-power

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 27 Feb 2024
Cape Town businesses were the first to earn cash for power since June 2023.
Cape Town businesses were the first to earn cash for power since June 2023.

Cape Town businesses and households have earned R25.8 million under the city’s cash-for-power programme since the start of the 2022/23 financial year.

This, after the city became the first metro in SA to buy excess solar photovoltaic power from small-scale generators in exchange for municipal bill credits and cash.

Last year, the city introduced an initiative to enable the sale of excess power by homes and businesses with small-scale embedded generation, to contribute to Cape Town’s goal of load-shedding protection within three years.

As part of this initiative, the City of Cape Town said it had set aside R53 million to enable the sale of excess power by homes and businesses with small-scale embedded generation.

According to the city, since 1 February, 1 461 sellers are benefitting from the scheme. Of these sellers, 869 are residential and 592 are commercial/industrial.

Over the years, Cape Town has been at the forefront of calling on government to allow it to procure its own energy, in order to wean itself from the embattled Eskom.

In a statement, mayor Geordin Hill-Lewis said key policy changes have enabled Cape Town power sellers to earn credits against their total municipal bill, and to go beyond that to receive cash for power fed back into the grid.

Previously, sellers could only be credited against their electricity bill up to a zero balance.

“We are transitioning this city’s energy mix to a far more decentralised supply of reliable, cost-effective and increasingly carbon-neutral energy that will come from a diverse range of suppliers. That must be the future for our country too, and Cape Town is showing the way.

“The most exciting part is that residents and businesses are going to play a crucial role in helping us to end load-shedding by working together as Team Cape Town,” commented Hill-Lewis.

The city will buy as much solar power as households and businesses can sell to it, with 25 million kilowatt-hours (kWh) already bought as at 1 February, he added.

In the 2022/2023 financial year, the city channelled more than R10.5 million to Capetonians for their power. In the current financial year, it has already paid over R8.8 million – a total of R19.4 million on the feed-in tariff alone, plus a further R6.4 million when including the 25c per kWh incentive added to encourage participation, it says.

“I consider this some of the best money we’ve ever spent and cannot wait to see how this programme expands even more over time. Not only are we adding crucial kilowatts to our grid at a cheaper cost than Eskom’s supply, we are also putting money back in the pockets of Capetonians. That is how you democratise energy and truly put power in the hands of the people,” noted Hill-Lewis.

Municipal bills are credited automatically, with the option to apply to earn cash beyond a zero balance. Businesses were the first to earn cash for power since June 2023.

“Cash-for-power payments are now being offered to existing residential customers, with the first phase of applications now open until 8 March,” says councillor Beverley van Reenen, mayoral committee member for energy.

“It is important to note that customers wishing to only offset their electricity and rates accounts, do not need to apply and will automatically be compensated on authorisation of their grid-tied SSEG system with feed-in.

“If customers are interested to go above and beyond this, they can register and get cash for their power – where any remaining credit will accumulate until it reaches a certain amount and then the city will pay you out.”

The “cash-for-power” trend has taken countries like the US and Germany by storm. However, experts warn that if it’s not implemented correctly, it could result in wasted energy and overburdened systems.

Overall, Cape Town says it is planning to add up to one gigawatt of independent power supply to end load-shedding in the city over time, with the first 650MW of this expected within five years, including enough to protect against four Eskom load-shedding stages by 2026.