South Africa’s government, energy regulator and Eskom have often been criticised for obstructing the introduction of distributed, small-scale embedded generation (SSEG) which would help businesses to cut costs and ensure the stability of their power supply during load shedding.

But in fact, there are significant and far-sighted tax breaks which have been put in place by National Treasury to encourage and incentivise business owners to install their own generation in the form of grid-tied, rooftop or ground-mounted solar PV systems on buildings, parking lots, warehouses, factories, and farms.

Accelerated depreciation allowances
From 1 January 2016, a little-known amendment to Section 12B of the Income Tax Act (Act 58 of 1996) allows for depreciation in the year of commissioning of the full (100%) cost of a grid-tied solar PV system of less than 1 MW used for electricity generation by a business in the course of its operations.

The capital depreciation allowances for solar PV systems greater than 1 MW remained unchanged in the January 2016 amendment to the legislation, which continues to allow full depreciation over three years. This permits depreciation of 50% of the capital cost in the year of commissioning, 30% in the subsequent year, and 20% in the third year.

The accelerated depreciation allowance for solar PV systems applies whether they are installed for the business by contractors or developers, or paid for by the business in a credit sale agreement (as defined in Section 1 of the Value-Added Tax Act) – either upfront in a single payment or in multiple payments over an extended period.

The cost of the solar PV system allowed for accelerated depreciation includes its full direct capital cost, including design and engineering, project planning, delivery, foundations and supporting structures, solar PV panels, AC inverters, DC combiner boxes, racking, cables and wiring, and installation. Finance costs are excluded.

This allowance was confirmed in a binding private ruling by SARS dated 11 October 2018 (BPR 311) in respect of an application by a private company in South Africa to clarify the deductibility of the capital expenditure incurred to install solar PV systems at a number of sites owned and leased by the applicant. The systems were being installed to reduce the company’s electricity costs.

The improved business case
Whether paid for upfront after commissioning, or in multiple payments over an extended period, the benefits of this tax incentive to business owners, particularly for solar PV systems of less than 1 MW, are significant.

Where the company tax rate is 28% and payment is upfront, a 100% tax-deductible depreciation allowance in the year of installation and commissioning will result in a 28% nett discount on the purchase price of the system at the end of the tax year.

This significantly affects and reduces the payback period of a solar PV project of less than 1 MW.

Better still, when paying for the same solar PV system on a credit sale agreement through multiple payments over an extended period, the transaction can be cash-flow positive for the business over the lifetime of the solar PV plant in all but the first months to the end of the tax year during which commissioning takes place.

With these significant tax incentives, and the rapidly rising price of grid electricity, the business case for installation of grid-tied, rooftop and ground-mounted solar PV is fast becoming a no-brainer.

Shout out from the rooftops
What is most surprising, however, is how few business-owners and companies are aware of these tax breaks, which can make such a positive impact on their cashflow and bottom line.

This lack of awareness is perhaps a result of the difficulties faced in accessing relevant information on the subject from SARS itself.

For example, efforts to simply download or view the up-to-date amended Section 12B of the Income Tax Act from the SARS website and the public internet proved fruitless.

Similarly, no response or even acknowledgement of receipt was received to a query sent to the SARS media desk at sarsmedia@sars.gov.za

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Emirates Water and Electricity Company, EWEC, has announced that 'Noor Abu Dhabi', the world's largest single solar project, with a capacity of 1,177MW, has started commercial operation.

The project will enable Abu Dhabi to increase its production of renewable energy and reduce the use of natural gas in electricity generation, helping to make energy more sustainable and efficient and reducing the emirate's carbon dioxide emissions by 1 million metric tonnes per year, the equivalent of removing 200,000 cars off the roads.

The Dh3.2 billion solar plant, located at Sweihan in Abu Dhabi, is a joint venture between the Abu Dhabi Government and a consortium of Japan's Marubeni Corp and China's Jinko Solar Holding.

Providing enough capacity to cover the demand of 90,000 people, the plant features more than 3.2 million solar panels, installed across an 8 km2 site. Beyond size, Noor Abu Dhabi broke another record at the time of bid submission attracting the world's most competitive tariff of 8.888 fils/kWh.

The achievement of Commercial Operation Date, COD, means the plant is now completed and has started full commercial operation. To reach this milestone on time, over 2,900 people were working on site during peak construction.

Mohammad Hassan Al Suwaidi, Chairman of EWEC said, "The completion of the project marks a significant milestone in the UAE's Energy Strategy 2050, launched in 2017, to increase the contribution of clean energy in the total energy mix to 50 percent by 2050 while reducing the carbon footprint of power generation by 70 percent. This is in line with the sector's transformation strategy by providing alternative sources of energy that can help us improve the sustainability of the water and electricity sector."

Othman Jumaa Al Ali, EWEC's CEO, added, "Noor Abu Dhabi will generate renewable energy and will enable us to improve the use of our natural resources. The fact that a project of such scale has been successfully completed on time and on budget highlights our commitment to ensuring sustainable energy for the future and it is a true testament of the emirate's delivery capabilities to execute world-class energy projects. Noor Abu Dhabi will further contribute to the UAE's renewable sector, exponentially increasing the existing solar capacity of Abu Dhabi, as well as adding to the continuously growing solar capacity of the UAE."

Kangping Chen, CEO of Jinko Solar, said, "It is our privilege to participate and contribute to the winning and successful execution of this significant project, which will help power the sustainable economic growth of Abu Dhabi. We are thankful to the government team for creating a world-class tender programme, their high-level of professionalism and their strong support throughout the process."

In line with the Year of Tolerance in the UAE, the project - a venture between international companies and managed and constructed by a multi-national team - signifies the multi-cultural essence of the country and its ability to nurture top talent from around the world.

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Namibia’s largest solar power plant, is soon to be officially commissioned by Alten Energías Renovables. The 45 MW installation is part of the government’s plan to reduce dependence on hydropower and, more importantly, imported electricity from neighboring South Africa, Zambia and Zimbabwe.

The plant is located in the Mariental municipality, in Namibia’s southern Hardap Region, 278 km south of the capital, Windhoek. Mariental has a hot desert climate with average annual rainfall of just 194mm.

The solar array will have a system capacity of 150 kW and will power Chobe Water Villas, a lodge complex which also has a 332 kWh battery storage system provided by Qinous to help reduce electricity consumption.

The added megawatts from this project will reduce Namibia’s dependency on energy imports during daylight hours, and is considered a small step forward to becoming more self-sufficient. The new power production plant will use PV solar technology and occupy a land area of 100 Ha.

The PV-storage system will be owned and operated by Cronimet as an independent power producer.  Cronimet’s joint venture with OLC Solar Energy, will provide operations and maintenance.

According to the Deputy President of Alten, Juan Laso, the plant will also help build on the solid commitment being made by ALTEN Energías to Sub-Saharan Africa in meeting the region’s vast energy needs. The will be the first large-scale grid PV power-generation plant to be added to NamPower’s energy supply mix, following the smaller Renewable Energy Feed In Tariff (Refit) projects.

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The National Energy Regulator of South Africa (Nersa) has finally released a consultation paper for an updated Licensing Exemption and Registration Notice for certain categories of small-scale embedded generators (SSEGs), which was submitted to the regulator for its concurrence by Energy Minister Jeff Radebe late last year.

Stakeholders and members of the public have been invited to comment on the draft amendment to the Electricity Regulation Act, with a deadline of May 24 set for submissions.

The notice seeks to replace the November 2017 Licensing Exemption and Registration Notice, which is widely accepted to be “flawed” and which has also caused significant market uncertainty.

The new notice exempts various categories of SSEG plant under 1 MW from the requirement to apply for and hold a licence under the Act, including a facility that supplies electricity to a customer who is an end-use customer.
One operated to supply an end-use customer, or related customers by wheeling.
And the operation of a generation facility for demonstration purposes only, whether or not the facility is connected to a transmission or distribution network.

The notice also covers existing generation facilities, including those that filed for registration with the regulator within six months of commencement of the registration process by the regulator.

It also covers the trading of electricity by a reseller.

Separately, Nersa’s electricity subcommittee approved, on May 13, registration applications for 16 SSEGs and one cogenerator in line with the 2017 Licensing Exemption and Registration Notice, which remains in force until the new notice is promulgated. 

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Are floating solar farms better than land-based ones?
Who needs to take up so much land when the Earth is 70 per cent water…
Where land is scarce, floating solar farms make it possible to generate renewable energy without taking up space that might be needed for farming or other purposes. The cooling effect of the water allows the floating solar cells to run more efficiently than on land. Most floating solar farms are installed on artificial lakes or reservoirs. For example, the world’s largest floating solar farm, recently unveiled in China near the city of Huainan, sits on top of a former coal mining area that has been flooded. By covering the water’s surface, floating solar farms reduce evaporation, saving water.

With load shedding here to stay for the foreseeable future, it’s back to basics for South Africans.
Call it load shedding, or rolling blackouts, the fact is it’s here to stay for the foreseeable future and South Africans are going to have to learn to live with it for a while yet.

The Citizen spoke to Lungile Mashele, an energy specialist at the Development Bank of South Africa, who also holds qualifications in economics, insolvency law, cost engineering and energy, about practical ways to minimise the effects.

“Have your work and home load shedding schedules handy. There’s no point in sitting in three-hour traffic to get to work to discover that there are no lights. Rather work from home until your office has lights,” advised Mashele.

“Keep your phone, power bank and torch charged and ready for a blackout. Invest in power-surge plugs. Continuous outages and related trips may damage your appliances.”

There is a growing conversation in the country over which is better: solar photo-voltaic power or fuel-driven generators.

“The preferred option is a complete retrofit of a home using gas to cook and for water heating, or solar water heating,” Mashele said.

“In addition to that, investing in solar PV with an inverter and battery storage will sustain you during periods of load shedding.”

Mashele explained an inverter converted the direct current produced by the panels to alternating current, and synchronised the power produced within the home with the Eskom grid.

“This option requires a rather large capital outlay. However, with the rising costs of electricity, it has a generally low payback period. A typical suburban household will require an investment of about R80,000. Depending on your consumption you can recover your costs within two to five years,” Mashele said.

“Generators present a cheaper alternative in terms of capital cost (about R10,000), but in the long run, the fuel cost renders this option far more expensive. Diesel generators can present a safety risk and are a noise nuisance not allowed by many body corporates.”

Load shedding survival tips

Plan your activities and travel around anticipated load shedding.
Be creative with dinners and activities to keep yourself and your family entertained.
Have braais and set up a tent for the kids with a campfire, especially during this holiday period.
Invest in rechargeable emergency LED lights. They are bright enough to light up the room for homework and household activities.
One can also buy an inexpensive two-burner gas stove at any major retailer and cook using gas.
Load shedding affects the ability of the water utility to pump water, so make sure you have water stored in the house.
It also means no fibre to the home, so make sure your phone has data or airtime.
Carry cash, as some retailers are unable to take card payments.

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Naria Security from Italy is looking for a local representative/agent for their innovative solar panel anti-theft system
This system protects every single solar panel, triggering an alarm in case of a theft attempt.
​Plastic fiber LiteWIRE links all the solar panels like a chain and is connected to a LiteSUN Plus analyser. Only bends and the cut of the fiber during a theft attempt can trigger an alarm. This system is free of false alarms, as it is not sensitive to vibrations, so weather conditions (like wind, rain or snow), leaves and birds do not trigger any false alarms. In addition, as plastic fiber is an insulating material, the system is not affected by any electromagnetic noise.
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• asy  and quick to install
• Every single panel is protected
• Zero false alarms (insensitive to vibrations and ground loops)
• Zero maintenance
• Plastic fiber cable LiteWIRE is used, which is easy to terminate and repair (basic tools are required, no measuring instrument)
  
  
• If only a cut of the fiber needs to be detected a simpler analyser, LiteSUN, can be used.​
  
  For more information and agency enquiries contact  alwyn@saaea.org

International Solar Alliance (ISA) on Sunday urged African states to tap solar energy to green their economies.
​ISA Program Ambassador Mohua Mukherjee told a media briefing in Nairobi that the bulk of African states are located along the sunshine belt with abundant solar energy resources.
"African countries should take advantage of declining cost of solar technology to achieve clean energy targets," Mukherjee said during the second global session of the United Nations Science, Policy and Business Forum on the environment.
The majority of the continent's residents are not connected to their national electricity grids, he said.
"This provides a great opportunity for Africans to use solar technology to power their electric appliances," she added.
The ISA will leverage on South-South cooperation to enable Africa benefit and borrow critical experiences from their peers in other developing countries so that they embrace solar technologies, Mukherjee said.
However, according to the global solar body, the high upfront cost remains a key barrier to driving uptake of solar technology among African households.
Mukherjee called for innovative technologies such as pay-as-you-go systems to ensure that the continent has access to solar equipment.
She said that by adopting solar technology, Africa can play a key role in reducing greenhouse gas emissions.
Mukherjee said strong economic growth in Africa in the past decade has fueled demand for energy in the continent.
"It will be prudent for the region to choose green energy sources that will accelerate the drive towards low carbon development pathways," she said.

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African renewable energy company, New Southern Energy, has installed a state of the art microgrid solution at Marlenique Farm, owned by the Van der Merwe Family of the renowned Boplaas in Ceres. The farm is located just outside Franschoek. The farm produces export quality fruit and runs an award-winning wedding and function venue.
New Southern Energy Installs First Commercial Floating Solar Farm in Africa 

The floating solar system is the first commercially operational system to be installed in Africa and, at 60 kWp, it is by far the largest.

The solution includes, an internal AC reticulation upgrade and consolidation of connection points, installation of a backup generator to run the internal grid in the event of power outages, a 534 kWp ground mounted solar system, a 60 kWp floating solar system and provision for infrastructure to allow for battery system to be included during phase two to take the site completely off-grid.

French floating solar developers, Ciel & Terre, participated in the project. Of their contribution to the state-of-the-art system, Jack Setton, Ciel & Terre’s EMEA Business Developer, said, “We’re delighted to have delivered South Africa’s first commercial floating PV installation, in collaboration with Floating Solar PTY and New Southern Energy. Irrigation reservoirs like this one are perfect for solar projects, and we see great opportunities on the Western Cape’s countless dams, particularly for clients such as wineries or fruit growers.”

Floating Solar (Pty) Ltd, the distributors for the Ciel & Terre floating solar system in South Africa, was established in 2017 as a Floating Solar PV equipment provider and project developer.

On the completion of the system, their representative Peter Varndell said, “Congratulations to New Southern Energy for completing this first commercial scale Floating Solar plant in Africa. There is significant potential to replicate this technology in the African market where it can be used to provide clean energy for mining, industrial, agricultural, water treatment works, hydropower and reservoir sites.”

The project was financed through Nedbank Agriculture with the savings from the system allowing the farm to operate cash-flow positive from day one, while paying the asset off over 10 years. With a long-lasting life-space the benefits of the system will be passed on for generations to come.

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