An alternative to higher energy tariffs: Extracting unused capacity from small-scale embedded solar

Abstract

Small-scale embedded solar (SSES) is already widespread in South Africa, driven by declining photovoltaic (PV) costs, rising electricity tariffs and grid instability. Nevertheless, the further expansion of SSES is constrained by its affordability and disincentives for energy trading. Real-time data from a 6.5 kWp PV with an 8/10 kWh battery were used to evaluate the techno-economic performance of SSES, focusing on the economic rationale for bidirectional metering and prosumer integration. It is shown that the levelised cost of energy is 75% higher than the cost of grid-based electricity. An important contributor to the high cost is the extent of unused generation capacity (50%). Scenario modelling shows that if this excess energy were sold to the grid, electricity distributors would realise significant revenue gains, fully justifying their initial subsidy of the metering and certification costs. This study concludes that enabling prosumer participation through municipality-funded bidirectional metering would stimulate SSES registration and partially offset the need for future tariff increases, offering a cost-effective pathway toward a more inclusive and sustainable energy transition in South Africa.

Significance:

• Eskom and local authorities are foregoing a strategic opportunity to profit from low-cost SSES energy.
• SSES is an expensive option for homeowners; the levelised cost of energy is 75% higher than the cost of grid-based electricity.
• A major barrier to authorised interconnection and energy trading is the additional cost of registration and bidirectional meters.
• The benefit to cost ratio of interconnection for electricity distributors is 5.2:1.
• Eskom and municipalities should subsidise these costs to drive energy affordability and resilience.