CONTEXT

South Africa is at a crossroads: it is the highest carbon dioxide emitter in Africa, and 90 per cent of the country’s electricity comes from coal. Furthermore, in a comparison of 27 upper-middle-income countries, the IEA concluded that South Africa has the third-highest electricity consumption per capita, just after the Slovak Republic and Russia. Although the decoupling of emissions and GDP is advancing, South Africa’s emissions are still high for a middle-income country. Concerning renewable energies, the Department of Energy states that, except for biomass, their potential has not yet been exploited optimally in the country. At the same time, South Africa has stood out as a ‘climate champion’, setting itself ambitious targets at COP15.

PV electricity generation can provide a reliable and competitive clean energy solution for households, as well as commercial and industrial facilities. Although solar PV technology has been improving and PV system costs have dropped significantly in the last ten years, there are significant barriers that need to be addressed.

ANALYSIS

The aim of this project was to scale up the use of PV systems and support the City of Tshwane in its journey towards becoming a low-carbon, climate-resilient and resource-efficient society. The strategy was based in a business model, which had to be accompanied by a set of mechanisms that aim to enable market conditions that manage to motivate end-users to invest in solar PV system solutions, engage financial institution and investors and attract technology providers. Also, the role of the municipality was be key to orchestrate the strategy and create trust among the different key actors. The strategy took into account current policy framework, the resources limitation and the current capacity and infrastructure of the municipal authorities. The strategy also considered the more suitable business models that could address the needs of the different market segments.

OUTCOME

BASE issued a report that presents six different business models that may be applied in the context of the City of Tshwane. The business models can be implemented depending on the level of involvement and roles that the municipality is willing and able to take.

The proposed models were: renting, pay-as-you-go, power purchase agreement, cash sale, microfinance and credit sale. There is no one-size-fits-all model due to the different characteristics and also due to the proposed instalment capacities of the PV systems of the different areas (Brazzaville, Olivenhoutbosch, Danville, Orchards and Moreletta Park).