Durban has opened the door for residents to start cutting down their home electricity bills by installing solar photovoltaic panels to their rooftops and selling surplus power to the municipality.

Launching the Durban Solar City framework project yesterday, city officials outlined plans to promote rooftop solar PV panels on homes, factories and office blocks with the aim of making sun power a “significant contributor” to the city’s future energy supply.

Over the next year, the city will also install more than R8 million worth of solar PV panels on several city buildings, such as the Moses Mabhida Stadium, Kings Park swimming pool and Ushaka Marine World to encourage the solar transition.

But for homeowners battling to pay for rising Eskom power prices, one of the most potentially exciting proposals is the introduction of a new residential embedded generation tariff scheme that would allow residents to “export” excess energy to the municipal grid and thereby reduce their electricity bills.

The proposal has been submitted to the National Energy Regulator of South Africa, but has not been approved yet. The catch, however, is that if Nersa approves the new residential tariff for Durban, residents would be paid significantly less for their power compared with the power tariffs charged by the city.

Durban residential tariffs charged by the city would be roughly R1.15/kWh, whereas residents would only be paid about 75c/kWh of power sold to the city (and they would still have to pay a fixed electricity service charge of R100 a month if they used less than 300kWh a month). Electricity officials say 320 000 Durban residential customers use about 700kWh of power a month in an average suburban home.

Officials noted that installation costs of solar PV panels were still quite high, and small-scale home generators were unlikely to make a profit from selling excess power to eThekwini.

However, the proposed scheme did offer opportunities for residents to start reducing the costs of home power once the initial installation costs were paid.

Senior eThekwini electricity engineer Sanjeeth Sewchurran said the City of Cape Town had a similar pilot scheme, but Durban could become the first city in the country to introduce the bi-directional tariff scheme, if it was approved by Nersa.

The scheme would also require the fitting of bi-directional meters to measure the flow of electricity produced or consumed by homes, factories and office blocks.

Because installation costs were quite high for small-scale solar PV panels, it could take eight to 10 years to start breaking even. This installation pay-back period was likely to drop as Eskom tariffs rose.

Susanna Godehart, project adviser for the Durban Solar City programme, said the aim was to promote solar PV as a “significant” contributor to the city’s energy supply.

“We can’t see into the future on how fast it will unfold – but it will go faster as electricity prices go up.”

It also created the potential for some electricity consumers to become “prosumers” by producing and selling electricity back to the local and national grids.

Godehart said the majority of small-scale solar PV installations in Durban were illegal from a town planning perspective.

She hoped this situation would change over the next few months as the city was busy simplifying the rules and regulations governing the solar PV approvals process.

However, one of the biggest hurdles facing a large-scale national roll-out of solar PV is the apparent reluctance of municipalities to sacrifice major chunks of revenue derived from “middleman” profit mark-ups on Eskom electricity.

Jonathan Curren of the Camco Clean Energy consultancy, which is assisting the eThekwini Energy Office, said the national regulator was expected to respond to municipal concerns later this year.

“Profit on electricity sales is significant. One of the main issues is the loss of revenue to maintain the municipal distribution network. In the worst-case scenario, the municipality has no customers left in 10 years and is left sitting on stranded infrastructure … So sources of new subsidies for lost revenue will be crucial,” he said.