Durban — Many home and business owners are increasingly weighing the switch to solar systems versus generators due to the persistent reality of load shedding and soaring electricity prices.
Managing director of Alumo Energy, Rein Snoeck Henkemans, said, “These are the most common questions asked by homeowners and businesses, especially as the ongoing national energy crisis, high electricity bills, and the inconvenience and loss of income associated with load shedding drives South Africans to consider other options.”
The solar energy experts at Alumo Energy therefore set out to answer these questions by performing a case study for a small business with a monthly electricity bill of between R15 000 and R20 000.
This case study compares the costs of four scenarios: doing nothing and remaining completely dependent on the grid, or purchasing a generator, installing a battery and inverter back-up system, or installing a hybrid solar solution with a battery and inverter back-up system.
Crunching the numbers, Alumo considered a range of factors including the impact of the initial investment costs, system maintenance, tax incentives, and savings on electricity bills.
Alumo assumed that this business was affected by Stage 4 load shedding for a period of 15 years, to determine which system is the eventual cost winner.
The cost of doing nothing and remaining completely tied to the grid certainly seemed attractive, because it did not require any upfront investment costs compared to alternative energy solutions, noted Henkemans.
Together, the impact of electricity prices and loss of income on their cash flow would mean that choosing to do nothing would actually cost them more than R28.8 million in losses during the period.
In the second scenario, the business remained partly reliant on the grid after purchasing a diesel generator, paying electricity bills that rose by the same 15% per annum as the first scenario.
“But, while the business would be protecting its profits from blackouts, it would subsequently be spending more on diesel. Assuming that diesel inflation amounts to 12%, this would mean additional expenses of nearly R1.69 million per year by year 15.
“Additionally, the business would need to pay maintenance costs every year which would likewise increase with inflation.
“Together, these would mean a total of more than R16.9 million in losses over the period.”
The battery and inverter back-up system successfully bridged the power gap during load shedding even though the business still needed to pay even higher electricity bills over the years to recharge the battery.
Despite spending slightly more than double the upfront investment cost when compared to the diesel generator, the business would only spend a total of more than R10.9m over 15 years on electricity and their battery system – effectively saving nearly R6m.
Alumo did not recommend completely severing ties with the grid, as the grid can act as an important back-up during periods of rainy or cloudy weather, for example.
In terms of expenses, the business using a hybrid solar solution with a battery and inverter back-up system would still need to pay a small electricity bill each month, as well as maintenance costs.
“In other words, the upfront costs of solar can seem quite high or expensive. In comparison, these systems clearly offer the best long-term value when compared to the cost of generators, battery back-ups, or, worst of all, doing nothing.
“This is especially true for businesses that require consistent energy supply to maintain their operations, protect their bottom line, and even potentially boost their cash flow in the future,” concluded Henkemans.
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