Financial Feasibility of Solar PV within eThekwini Municipality- Residential Customers

Abstract

Rising electricity tariffs, electricity shortages and reducing costs of solar PV systems in South Africa has made investment in solar PV a lucrative option to many residential customers. However, revenue loss is a major concern to municipalities who have historically designed residential single rate bundled tariffs which relies on the municipality selling electricity to ensure business sustainability. Municipalities have come up with many new proposed tariffs structures to try and counteract the impact of reduction in electricity sales. This is done by implementing net metering tariffs with a network access charge component, based on the customer’s inverter size. An investigation was carried out to better understand the impact to the feasibility of a residential solar PV system with and without the implementation of these new net billing tariff as well as its impact on the customer’s payback periods. The eThekwini Municipality’s proposed residential net billing tariff is utilized for this case study.