PHOTON International The Photovoltaic Magazine

South African poverty tariff could be in place by April

A roadblock that had been causing delays in the full implementation of a South African program to install up to 300,000 solar home systems may have been removed. On Dec. 6, the treasury committee of President Thabo Mbeki's cabinet approved a long-awaited plan for subsidizing electricity costs to the poor.

	© Solar Vision and Scan Solar SA (Pty) Ltd.
Shaking hands: With the poverty tariff finally passed David Motaung of Solar Vision (right) likely will welcome more people like Philemon Ndou (left), the first Solar Energy Store Owner appointed by the company in the South-African village of Mbahe.

The 1.4 billion ZAR ($152 million) program, funded for three years, also includes an off-grid poverty tariff intended for homeowners with solar home systems leased on a fee-for-service basis (see PI 12/2002, p. 8).

At press time, the subsidy amount had not been finalized. David Mahuma, an analyst at the Department of Minerals and Energy (DME), says his agency suggested 40 ZAR ($4.33), which would be deducted from the flat monthly SHS fee of 58 ZAR ($6.28). According to Gary Whalley, managing director of the concessionaire Solar Vision (Pty) Ltd., the amount may end up being lower. »At this point,« he says, »anything that reduces the flat monthly rate would be beneficial.« Whalley wants the concessionaires to be able to claim the tariff directly through the national government rather than having to go through local government offices. Along with three other concessionaires, he was planning to submit a letter to the DME by mid-December recommending that the tariff be put into operation as soon as possible. Mahuma says the earliest it could be offered is at the start of the next fiscal year in April.

In 1999, five companies each won exclusive rights to install 50,000 SHS in several off-grid concession areas while providing 20 years of service and maintenance. Advance publicity about a poverty tariff led potential SHS customers to await its implementation. In addition, the concessionaires were unhappy about the capital subsidies of 3,500 ZAR ($380) per SHS, the value of which had been eroded by currency devaluation. The concessionaires decided to opt for a one-year interim program instead of the original five years. Whalley says they plan to discuss the capital subsidy with government officials sometime in the first quarter.