BY JOHN WHALL
An increasingly popular trend over the past few years in the commercial property sector is the installation of solar technology. This is largely being driven by technological innovation which has resulted in greater cost efficiencies and increased demand as the cost of electricity in South Africa continues to skyrocket.
All indications are that solar energy is the fastest growing alternative energy industry globally. Its adoption is already impacting the way buildings are planned and constructed. No longer is solar an after-thought, rather it is becoming part of the upfront design of new commercial buildings in a drive to construct properties that are energy efficient and cost-effective in the long term. And those who don’t have solar are switching. John Whall, CEO of Heartwood Properties outlines some of the reasons why solar is no longer just a trend.
The Eskom battle
There is no doubt that the high cost of electricity – and the notorious unreliability of Eskom’s power supply in recent years – is playing into the growing appeal of solar. Eskom CEO Jabu Mabuza recently announced that the power utility, in its current structure, is not sustainable. Eskom has applied for substantial tariff increases in the next three years: 15% per year for the next three years, as part of its efforts to generate sufficient revenue to meet at least some of its staggering debt commitments. But, as a RMB Global Markets Research comment points out, the compound effect of all Eskom’s ‘moving parts’ is a tariff-increasing path that could see the standard traffic price of electricity rise by 90% over the next five years.
Rising electricity costs, coupled with recently re-introduced load shedding, ensures that commercial buildings which offer solar technology have a competitive advantage over a building which relies solely on Eskom for its power needs.
In the past few years solar energy has become an increasingly viable option as it has achieved the price parity point: that point where self-generation becomes more cost effective than retail electricity bills. As solar panels become more effective, battery storage facilities are increased and costs are reduced, solar installations will increasingly become the norm both for existing buildings, but particularly for new developments.
Solar energy has the benefit of being a significant resource that can be used for a multitude of everyday needs including electrical power heating and cooling, amongst others. Globally, consumers are looking for the most reliable, affordable and environmentally responsible energy source. Solar fits the bill in terms of both affordability and by being environmentally responsible. Reliability, however, is a function of the prevailing weather conditions. The key challenge with solar energy is that it’s only available during the day in sunny weather but is not available during cloudy or rainy days.
Currently, there is not yet sufficient technology in place for residential solar installations in South Africa, primarily due to insufficient battery storage given that homes require the bulk of their power needs early in the morning and in the evenings. That said, as new technologies are deployed costs will decrease and integration will be improved. Residential solar installations are therefore likely to become increasingly popular within a year or two according, to numerous experts we have consulted with on this topic in the past year.
There is no doubt that renewable sources of energy are the future. And with the current uncertainty around Eskom’s long term sustainability in question, solar installations are making more and more sense.