We all know that Solar PV is being rolled out in SA on a large scale and this market continues to grow especially in these times where we are facing economical challenges.

The implementation of this technology has only seen real growth in SA in the last 4 years, while Europe has reached its peak for implementation of Solar PV, already in 2012.

Since 2016 investment companies have focused their efforts on the development of Power Purchase Agreements based on solar PV generation plants by means of partnerships with Solar EPC companies.

Since 2017 the information available on installed capacity and PPA structures is very limited as this became part of the IP of companies performing these services

How does it all work?

Grid – Tied / Off- Grid and Hybrid systems

These systems convert generated energy directly from the sun into instantaneous electricity; the main function is to support the Grid. It runs parallel with the utility provider and if the power generated from the sun is insufficient, to power the demands, the grid will supply the short fall. The inverse of this is, if the system generates more than the requirements then it will feed it back to the grid. These systems have no storage or backup capability as it needs a grid reference to produce power. NO GRID – NO PRODUCTION. The capex is low on these systems and the ROI is extremely attractive. Most PPA models are based on Solar Grid-Tie systems.

According to IRENA (March, 2017), Asia had the greatest solar uptake in 2016, bringing their total capacity from solar to 139 GW. A significant chunk of new installations occurred in China, contributing a total of 34 GW. From the previous year, other notable solar expansions took place in USA with an 11 GW increase, Japan with an 8 GW increase and India with a 4 GW increase. Europe reached a total of 104 GW from solar; most of which is due to the large uptake in the United Kingdom and Germany.

Off grid

Rising electricity prices, potential for power outages awareness on the need to reduce greenhouse gas emissions and decreasing technology costs have made investment into small scale embedded generation more attractive to many end-user consumers (residential, commercial, Industrial). Such installations are already commonplace in industrialised economies but developing countries, such as South Africa, are now observing a similar emerging trend.

South Africa continues to experience an increase in consumers implementing this technology, a trend that can be traced as far back as 1992. The trend of increased installation has only recently accelerated in earnest, given the low electricity tariffs offered by Eskom prior to 2010. The trend in installations is visible across all segments of consumers including industrial, agricultural, commercial and residential. Solar PV cost is forecasted to decline and continue to do so along this trajectory for the foreseeable future.

In the last 10 years with all the new developments in the solar industry, the market indicates sharp declines in the price of photovoltaic panels as well as indications of enormous technical advances in other solar technologies such as power storage and battery technologies. There has been an exponential increase in the installations of solar PV across the board by homeowners, businesses, and government industries in South Africa. Current installations are largely driven by a combination of supportive local government policy frameworks above inflation prices as well as decreasing technology costs. These have made investment into solar PV attractive to South African businesses, as they can save up to 30% in electricity costs with Grid tied PV solutions and 90% with storage solutions. These systems pay themselves off within 3-8 years from date of installation which offers the benefit of free energy for nearly 15 years thereafter.

Hybrid Solar

South Africa and its geographical location is one of the most ideal locations for solar installations. This is attributed to the fact that most of our country averages more than 2500 hours of sunshine per year, which is amongst the highest in the world.

The more irradiation the panels receive the more power they generate. Overcast and cloudy days the panels function with a reduced production capability. With our specialized designs and experience in this field we can easily overcome this scenario. In South Africa as electricity cost continue to rise, the option of solar energy is becoming ever more viable as it offers a more attractive and cost-effective option for businesses in South Africa. Whilst there is an initial cost of outlay of this solar option, these costs are easily re-couped within 3-8 years on current average for businesses opting for this technology. These options offer a very attractive internal rate of return (IRR) considering the solar energy will be free after the initial payback period. Solar PV does not only offer attractive savings models for businesses but also has the potential to open further avenues for investment from companies by means of Power purchase agreement. (PPA’s). Solar energy is the future and will not only provide investment opportunities but also pave the way for energy security and economic growth in South Africa and Africa as a whole.

Over the past year, it has also become evident that power purchase agreements (PPA) offer some of the best models for utilizing solar generation for private use, the Department of Energy in November of 2017 announced that businesses are able to enter into PPAs with service providers in the private sector, by allowing businesses to buy electricity from solar power providers at reduced rates without the need to own or maintain the associated infrastructure.  A PPA service provider is contractually bound to deliver electricity at an agreed (should be below national grid tariffs) rate, leaving the responsibility of maintaining and optimizing the system up to them. This allows the client to achieve optimal savings at all times, while not diverting any time or resources away from the company’s core functions.

The investment opportunity is made possible by the levelized cost of solar energy over a period of 10 to 20 years.

This is where FactorySolar comes into play.

After observation from many years in the construction industry and particularly with some larger projects that they were involved in, the following came to the attention of the owner- the adverse impact of skills shortages and experience in RSA and many other regions in Africa. He also realized the lack of standards and quality in the commercial space, when compared to petrochemical and mining standards.

FactorySolar was established as a Consulting, Electrical, Control, Instrumentation and Energy Solutions company. Their focus is to provide Instrumentation, Automation and Electrical solutions to their clients. They can engineer, design, procure and construct Electrical, Instrumentation and solar PV systems. A combined team of professionals.

As a South African based photovoltaic system integrator they develop, plan, build and operate commercial and industrial photovoltaic systems. FactorySolar supplies solar modules and accessories. As a prime contractor for high quality engineering, procurement and construction they focus to be on-time and on-budget to provide reliable long-term system outputs for owners and investors.
The focus of FactorySolars’ activities is to supply solar and ecological energy technology and to deliver integrated sustainable energy production solutions. Our product portfolio comprises of solar systems for private and commercial users as well as the public sector.

For more info contact us…..