MTBPS: Eskom billions should have been reallocated to help poor households trade in electricity

Rooftop solar micro-entrepreneurs in South Africa are transforming the economy. Picture: Tilo254/Pixabay

Rooftop solar micro-entrepreneurs in South Africa are transforming the economy. Picture: Tilo254/Pixabay

Published Nov 2, 2023


Eskom has saved more than R700 billion from rooftop solar power generation, and Finance Minister Enoch Godongwana should have used this money to help struggling households trade in rooftop solar energy and, thereby, reduce their poverty levels.

Rooftop solar power provides more than 20 percent of South Africa’s electricity needs and not only saves Eskom R702bn but beats load shedding and pollution, and helps improve the finances of low-income households.

Labour law specialist Cofesa (Confederation of Employers in South Africa), therefore believes that Wednesday’s Medium Term Budget Policy Statement (MTBPS) “could have given poverty a deadly blow” if Godongwana had answered the organisation’s plea to reallocate these billions to help low-income households become rooftop solar micro-entrepreneurs.

‘Electricity welfare’, says Cofesa director Hein van der Walt, is now a newly identified human right – a ‘meaningful socio-economic benefit’ benchmark for low-income residents instead of the present 50KW. A total of 350KW per month will amount to an estimated R50 trillion per year.

“Fifty-five percent of households have to choose between electricity and food. They have monthly incomes of less than R6,000, and with a pre-payment meter, cannot afford about R800 – nearly 15 percent of their monthly income, to buy R350 kWh.”

For this reason, Cofesa would have liked the billions saved by Eskom to have been reallocated to:

  • Zero Vat and zero import duties on rooftop solar systems and equipment, cancelling 45 percent duty and tax increase on imports from China to South Africa.
  • Boost free wheeling for solar generator-enterprises like households, factories, and schools to trade on power grids.
  • Boost micro grids in residential estates and townships for households to sell power to their neighbours and into the grids.

Enabling households to trade in rooftop solar energy will beat poverty and pollution.

“Energy is the most precious commodity on earth. Cape Town’s power-purchasing from households leads this trend. It is financed by R1 trillion earmarked for green power generation by the banking sector. Like in Vietnam, more households will soon sell energy to the grid and to neighbouring houses.”

Link between rooftop solar energy and GDP

From poverty in the 1980’s, van der Walt explains that Vietnam increased its GDP four times, boosted by a cut in VAT and a decline in borrowing cost. The country now aims to rank as the 10th largest economy in the world by 2050. Rooftop solar energy generates surplus energy in the country each year.

Furthermore, the trading of energy increased the GDP of Bangladesh.

In South Africa, he says rooftop solar micro-entrepreneurs are also transforming the economy.

“This empowerment tool will accelerate when more metros start buying power from rooftop solar entrepreneurs. This will save government an estimated R100bn annually for enterprise development. The cost of one job created by government is calculated at R750, 000 with a failure rate of 75 percent within the first year.”

Solar silicon prices had declined by almost half from early February 2023 and the world’s largest solar manufacturer has slashed the prices of silicon wafers by 31 percent, bringing solar panel prizes down 21 percent. Battery prices are also decreasing, proving Chinese President Xi Jinping’s “goodwill”.

“At the 2023 BRICS he stated: ‘Our relationship has entered a ‘golden era’, enjoying broad prospects and a promising future’. We implored Mr Godongwana to treat China as a ‘partner’ not a ‘competitor’. As partners, we do not have to, and we cannot, beat China’s economy of scale, or quality and price in the manufacturing of solar panels and equipment...”

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