As more and more businesses and homeowners take up Government’s offer of tax rebates for rooftop solar installations, demand for electricity from municipalities is decreasing. This is a problem for municipalities which rely on the profit they make from selling the electricity they buy from Eskom to consumers. Suddenly, they are seeing a sizable chunk of their income disappearing.

By and large, South Africans are tired of the inconvenience load shedding imposes on their lives. There is also a growing sense of concern that, despite the Government’s comments to the contrary, load shedding will be with us for many years. Having a set of PV panels and batteries installed at one’s home or business is not cheap, but is better, safer, and more efficient than running a petrol-powered generator for a few hours every day.

One solution open to municipalities is that they offer to buy surplus electricity from the businesses and homes under their jurisdiction using a so-called “feed-in” tariff. This tariff is lower than the rate they pay Eskom and would provide those municipalities with another source of electricity that they could sell to consumers and make an even higher profit.

Another option that has been mooted is that municipalities charge all residents and businesses a “service fee”. This service fee would cover the infrastructure needed to supply those homes and businesses with electricity during a prolonged period of rainy weather. Everyone would be expected to pay it, whether they buy electricity from the municipality or not.

It was recently reported that Pravin Gordhan, the minister of public enterprises, said that Buffalo City Metropolitan Municipality in the Eastern Cape had seen a decrease in electricity sales to the tune of R350 million in electricity sales due to customers providing their own power.

Eskom data shows that electricity generated from solar panels from March 2022 until the first quarter of 2023 had increased by 350%. Although this is good from an environmental perspective, the minister said, it poses a significant challenge to municipalities.

Residents may find themselves having to meet this shortfall in their property rates as municipalities try to mitigate their losses through the decrease in electricity sales.