Estimating the economic potential of PV rooftop systems in South Africa's residential sector : a tale of eight metropolitan cities

Abstract

The cost of producing electricity with solar photovoltaic (PV) has decreased drastically in the past 10 years, so much that the installed PV capacity has increased exponentially between 2010 and 2018. South Africa is endowed with a technical potential of 72 GW for PV rooftop systems, but the economic potential is largely unknown. As a result, the integrated resource plan assumes that an annual installation of 200 MW of distributed generation will be made between 2018 and 2030. This study evaluates the economic potential of rooftop PV systems in the residential sector within metropolitan cities in South Africa using financial metrics. The important financial metrics used to qualify an investment are net present value, internal rate of return (IRR) and payback period. An investment is expected to pay itself back in less than 10 years with a high rate of return (IRR). Households are classified into living standards measure so that it is easier to map customers to related tariffs. Using this method, the eight metropolitan municipalities will have PV economic potential of 11 GW in 2019 and 22.7 GW by 2030 if the current tariff grows at 5% and the tariff structure does not change.