Green Economy Journal Issue 62

ENERGY
ENERGY
Your best option is to get as close
to 90% or more of your electricity usage
coming from self-generation.
up performing as a solid investment, in which you yield a return. The
payback period length can vary due to differences in peak sunlight,
solar array size and other factors. Many homeowners report breaking
even on their investment within five to seven years, but with the
skyrocketing cost of electricity each year, this payback period is
coming down all the time. You can calculate the solar payback period
with the following formula:
Initial system cost / annual electricity savings = payback period.
(Break-even)
ROI FOR YOUR SYSTEM
Return on investment (ROI) is related to the solar payback period, but
instead of calculating the time it takes to break even, ROI calculates
the total amount of money and savings that a PV array will provide
over its lifetime and the expected utility costs for the same period.
Consider the following example: On an electricity bill of R2 450 per
month, which is around 700kWh usage per month (23kWh/day) at a
tariff of R3.50 per kWh (2023), the system spec and cost looks like this:
System spec
• 5kW inverter
• 10kWh lithium-ion batteries (upscale your batteries for reasons
explained earlier – its cheaper per kWh than Eskom/council)
• 4.3kW solar panel array
Price, fully installed with all materials and COC: R148 000
This size system will generate between 20kWh to 22kWh per day –
90%+ of your daily electricity needs.
On an upfront purchase
• Based on an 18.65% electricity tariff increase this year and 12.74%
for the next year and a very conservative 5%/pa thereafter (this
figure is going to be higher as it does not factor in the increases
that local councils will add on top of this).
• Your breakeven point is just over five-and-a-half years based
on electricity savings.
• Your ROI is based on a conservative escalation of 5% in electricity
tariffs from year three. Your cumulative savings on electricity
costs will be R350 000 after 10 years and R940 000 after 20 years –
this is a savings multiple of 6.3 on your original investment
of R148 000.
On a finance option
• Based on prime interest rate, with a finance term of 60 months
with no annual escalation, your monthly repayment cost is
going to be around R3 580. (Figures may vary based on your
credit rating and rates applied.)
• Your savings on your monthly electricity bill is around R2 200
per month in year one and which then escalates as does the cost
per kWh of grid electricity – this saving will offset a significant
portion of the monthly loan repayment.
• Your system will be fully paid off in five years (60 months) and
you will own it, and for the rest of the 15 to 20+ years of the
system’s lifespan, you will be generating your electricity for
free, with less than a 10% reliance on grid electricity.
CHOOSE YOUR PARTNER CAREFULLY
Getting the best return on investment in renewable power, whether
for your home or your business, will be based on the initial cost
to install your system, the amount of energy it will produce and
store, and what this will mean in terms of electricity bill savings, as
well as the quality and performance of the equipment, installation
and ongoing management of your system. Enlist the help of a
renewable energy installer that can fully explain your options
and show you the calculations. And remember with the right
set-up from the start, you can expand your system capacity as
your budget allows and your needs change.
Work with a credible, qualified and accredited renewable
energy partner that will be around for back-up, support and
ongoing consultation over the lifespan of your system – that’s a
good 20 to 25 years.
The proper installation and management of a solar PV system
is a complex undertaking that requires a deep understanding
and experience of the various technologies on the market that
are suited to the specific circumstances of every client and site.
ACCELERATING the
TRANSITION
Air Products South Africa, a 50/50 joint venture between Air Products and Chemicals (USA)
and Remgro, has operated locally since 1969. From the solid foundation of its existing core
industrial gas business, the company is accelerating the transition to a cleaner energy future.
Green Economy Journal caught up with the new MD, Charles dos Santos.
Congratulations on your appointment as MD of Air Products,
Charles. Please share your career trajectory to this point.
I studied Chemical Engineering at the University of the Witwatersrand.
As I had a business interest, I continued to study part-time for a BCom
at the University of South Africa. I started at Air Products in 1994 in
the bulk sales department, but soon moved into plants and projects
business development. I was responsible for securing key growth
projects that lead to my promotion to departmental manager. After
many years in that role, I was offered an opportunity to become
the managing director of a company called The Combustion Group,
which gave me experience leading an organisation and I learnt
more about energy (natural gas) and power generation.
Following on an unexpected retirement, I was offered an opportunity
to return to Air Products as the general manager of the on-sites
business unit in 2016. From 1 February 2024, I will be taking over
as managing director from Rob Richardson, who is retiring.
Please tell us about Air Products.
Air Products manufactures and distributes (via pipeline, bulk
tankers or in cylinders), a variety of industrial and specialty gases
and supplies related equipment and engineering services to
customers in industries including steel, petrochemical, mining
and metal processing, manufacturing, food and beverage, among
others. Founded in the USA in 1940, Air Products operates in over
50 countries. Air Products aims to be the safest company to work
for and strives to provide excellent service to our customers.
Hydrogen has the potential to be a game-changer in the quest
for sustainable transportation. Please expand.
Zero-emission hydrogen fuel cell vehicles can decarbonise heavy
modes of transport, like buses, trucks, trains and ships. However,
this will require the commercialisation of economical hydrogenpowered
vehicles. A 20% reduction in global emissions is possible
if hydrogen is utilised to decarbonise heavy-duty transport and
industry. Furthermore, this hydrogen will be produced locally from
our abundant renewable energy resources, creating jobs locally,
giving South Africa energy independence and improving our trade
balance (as it reduces our imports of fossil fuels).
Air Products is ideally positioned to lead in establishing a
sustainable hydrogen ecosystem in South Africa. How so?
We are an experienced, well-established South African hydrogen
supplier. We have almost 150km of hydrogen pipelines supplying
existing industrial customers in the Vaal Triangle and Springs. These
A 20% reduction in global emissions
is possible if hydrogen is utilised to
decarbonise heavy-duty transport
and industry.
pipelines cross or are located close to major transport routes like
the N1, N3, N17 and R59. We also have a fleet of hydrogen tube
trailers and numerous hydrogen cylinders in circulation.
Being part of Air Products globally, we have access to global
best practices, technical support and know-how to leapfrog
development phases and speedily roll-out the tried and tested
and latest technologies.
Please discuss the challenges associated with hydrogen refuelling
infrastructure in South Africa.
First, hydrogen is currently costly to transport over long distances
and impractical to store in large quantities. Second, the current
hydrogen infrastructure is primarily limited to regions around
Gauteng. Capital intensive distributed hydrogen generation and
pipeline systems will be more optimal. This would use the existing
power grid infrastructure to transport renewable power to the
hydrogen generation sites. Although upgrades are required to the
South African power grid, these upgrades are needed anyway to
meet the country’s electricity needs.
As a starting point, it makes sense to focus on captive fleets (ie
fleets that come back to base daily or only transport goods on set
routes around which the infrastructure can be built).
However, the elephant in the room is how will the South African
economy be able to afford green hydrogen? The cost of green
hydrogen will be higher than our traditional fuels. The capital cost
of fuel cell vehicles is still much higher than diesel vehicles and the
availability of vehicles is still very limited. The manufacturers do
not have sufficient capacity yet to meet the needs of the market in
Europe etc, which are much more attractive bigger markets with
the appetite and ability to pay the premium for green mobility. So,
this industry is potentially going to take some time to develop in
South Africa.
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