Over the past few years, great focus has been placed on alternative energy sources in South Africa and globally. Significant increases in the prices of oil and coal have made solar energy a more economical option. Load shedding in 2015 and the price increase of electricity have led to a focus shift. The initial cost of solar panel installation also became more affordable with a drop in the price of the equipment required.

Producers are increasingly considering building solar power systems for domestic use. However, it is also possible to build a larger system, known as a micro solar farm, to sell a certain amount of the electricity generated to Eskom. This is a viable option for wasteland which is not fully utilised on farms. With regard to global solar radiation, South Africa is perfectly positioned since it boasts an average of more than five hours of sunlight per day, which can be effectively used to generate solar power.

Financial viability

Each kilowatt (kW) generated by solar power represents a direct saving. Currently small and micro solar farms, generating less than 1 000kW (<1MW), are financially more justifiable if a contract has been entered into with Eskom. If more than 1MW of solar power is generated, it is no longer considered to be in this category, because it involves a more complicated process of generating power not intended for personal use.

The application process is time-consuming, but in the long run it is worth the while. The first key step in the process involves an estimate by Eskom. This gives an indication of whether the producer is able to negotiate a power generation contract with the public utility.

The principal considerations of the estimate are the amount of power that can be supplied and the period of time for which Eskom would commit itself to the producer’s solar farm. Therefore, no recommendation can be made before an estimate is carried out by experts to determine which size would justify the erection of the facility.

In respect of cost estimation, the producer should make calculations to determine whether the planned solar farm is financially justifiable. Consultation with experts, consisting of companies that specialise in solar farms, is essential in this regard – the reason being that there are various formulae for determining the financial viability of such a high-tech facility.

Net energy metering

Eskom usually prefers a net energy metering (NEM) contract which includes aspects such as ‘banking’. Such a contract entails excess energy is sold to Eskom, while banking signifies that the farm generating the energy can store it in the Eskom network for future personal use.

With such storing, the maximum amount of energy is generated and the excess energy which is not used by the producer is supplied to the Eskom network. The producer builds up a credit supply of energy in this way, which is returned to him at a lower rate to use when his need exceeds his generating ability.

A new aspect of building a solar farm, is that in future the National Energy Regulator of South Africa (Nersa) will require the producer to apply for a licence, or alternatively for exemption from it. These licence requirements were announced at the end of June 2016, but no guidelines, requirements or application processes have as yet been announced by the Department of Energy. The last key aspect is that a basic analysis for an environmental impact study must be done if the area is larger than one hectare (±250kW).

Layout and construction

Construction of a typical solar farm of 750kW takes 12 to 20 weeks to complete, depending on the area and size. The first step involves security. This aspect on a solar farm is vital, and 2m-high fences are required. Secondly, the foundations are laid, earthworks done and cables laid.

Next in line is the construction of security systems and installation of the modules. This is followed by the converters, transformers and switch gear before the farm can be linked and supply to the network commences. The main aspect to bear in mind, is that the solar farm has to store its own power in a battery system to keep its control and security system operational in case the Eskom line is disconnected for maintenance.

A 3,1ha solar farm in the Marble Hall district of Limpopo boasts an average power generation of 750kW. The solar panels or photovoltaic (PV) modules are 1,92 by 0,96m and are mounted at a minimum of 1,1m above the ground. The area used for the solar farm must be level with no buildings, and should be located near Eskom power lines or a substation. As the panels are a minimum height above the ground, small stock are still able to graze.

Financial implications

Eskom rates increase annually, but the power supplied by the sun of course remains free of charge! Therefore, the potential savings are exponential. With the increase in electricity prices, the payback period of capital required for the establishment of solar farms has started dropping drastically over the past few years, because more funds are invested into power which is put back into the system.

The basic principle is that power generated by the sun in itself represents a saving on operating costs. Solar power utilisation should be viewed as capital utilisation and not as a direct saving on running costs. Once the solar power modules have been erected and paid for, the energy generated is free.

In certain cases, it is cost-effective to use both solar and Eskom power. The planning and application of the technology, however, is where savings justify the capital outlay. Bear in mind that the account can be consolidated for maximum benefit of usage.

A producer can expect to recover his installation costs over a period of five to eight years, but this estimate is based on the type of system installed, the kind of contract negotiated with Eskom and the farm’s monthly consumption.

Advantages of going solar

According to Eskom, the advantages of solar power are:

  • It is renewable and clean, with almost no direct radiation.
  • Power supply points of Eskom can be consolidated if there is a single account holder. Therefore, supply and consumption can be better managed.
  • Panels can be used in any part of South Africa and provide a more constant supply than e.g. wind power.
  • Solar power for low energy consumption can be stored in batteries, and for high energy, up to 1MW can be stored on the network for later use.

Factors to consider

  • Without suitable batteries for storage, the generated energy is wasted with low consumption.
  • High consumption must be balanced with the producer’s consumption and his contract with Eskom, or else excess energy generated will not be taken into account.

For domestic consumption, solar panels are a good investment with the necessary infrastructure, such as solar geysers or solar water heaters and batteries. Solar power generated during the day is common practice abroad.

Solar farms offer numerous advantages, as the power generated can be for own consumption, saving on costs, or returned to the national grid, something which generates income. Privately owned solar farms are becoming more common. These initiatives contribute to the supply of much-needed electricity to the network. Several combinations of usage are possible, but careful investigation will determine the benefits to the producer. –Simone Nieuwoudt, Department of Agricultural Economics, University of the Free State

For more information on solar farms, contact Daan Hamman at Telenetix, an alternative energy solutions company, on 083 463 0921, 086 188 7874 or email daan@telenetix.co.za.

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