Is solar energy expensive energy?
 

We all accept the fact solar energy is the way forward for South Africans that are fed up with rising electricity costs and the inconvenience of load shedding. However, is solar power really the way forward? Could solar power in actual fact be more expensive than fossil fuels? Lets have a look at the costs of solar power compared to that of Eskom’s coal powered electricity.
 

The costs of solar energy

A couple of years ago the costs of a photovoltaic system was R5 kWh compared to Eskom’s R0.50 a kWh. Solar power has now plummeted to R1 per kWh while Eskom has risen to R1.84 per kWh.
 
The drop in solar power’s price can be attributed to many factors such as a rise in demand and drop in production costs.
 
Installing a solar power system that is able to power all the necessary appliances is still not within reach of most South Africans as such a system is expensive.
 
Let’s look at the breakdown of such a system

Solar panels R91 000
A battery bank R72 000
Inverter R36 000
Additional costs R34 000
Total Costs R233 000

 
Keep in mind this would be a Maserati of solar power systems and battery banks are not necessary but advised in South Africa where the power delivery is unreliable and power cuts common.
 

Long Term Investment

Lets look at this investment over a period of twenty years. At a cost of R200,000 it would equal R2,000 a month. If you take current electricity bills into consideration as well as the fact that Eskom is planning major tariff hikes you would most likely start making your money back within 5 years. And after twenty you would be making huge electricity savings.
 
Some estimate that you would be able to bring your electricity down to 80c per kWh. That is a lot less than the current tariff of R1.40n per kWh that Eskom is charging now.
 

Environmental costs

Yes, the production of solar panels produce tetrachloride and other toxic waste products but these production plants are tightly measured by the industry as not to lose credibility.
 

Let’s look at coal

We aren’t going to look into the environmental impact here as we all know that coal is known as the dirty commodity. Let’s rather look at the coal situation in South Africa at the moment.
 
After the Second World War there was a decision made by the South African government that the economic rebuild should be based on coal as it was cheap and widely available. This is no longer the case.
 
90% Of the electricity produced by Eskom comes from coal fired power stations. These run 24 hours a day and is supposed to be supported by Independent Power Producers (IPP’s). This is because the South African government decided back in the late 90’s that IPP’s would be better than extra coal fired power stations. The IPP’s never materialised.
 
As a result South Africa is in the middle of an energy crises as the demand for energy rose, but the supply didn’t. Therefore the demand for coal has also soared and can also not be supplied.
 
This is known as the looming coal cliff. The shortfall ranges from 60 to 120 Mt and is expected to be at its worst by 2019. This means that coal is just going to become more expensive and so are the electricity tariffs.
 

What’s the Verdict?

All in all the production and installation costs of solar power systems are offset by the savings in the long run and the reduction of carbon emissions. It is an investment that will create much bigger returns in the long run.
As more users go onto solar energy, Eskom will naturally have to raise their tariffs to make up for lost users.
 
If you are interested in solar power contact us here for more information.

 
 
 
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