PHOTON International The Photovoltaic Magazine

Confusion over start date for South African poverty tariff

While some reports indicate that a poverty tariff to help poor South Africans pay their electric bills, seen as essential to sales of solar home systems (SHS), has already started, others say it may not kick in until June or July.

	© Solar Vision and Scan Solar SA (Pty) Ltd.
Rate change: A poverty tariff that would decrease monthly SHS fees may be close at hand.

Since Nov. 2001, government officials have been promising to introduce monthly buy-down fees of 40 ZAR ($4.72) for SHS. The delay has been considered a major stumbling block by five concessionaires who in 1999 each won exclusive five-year rights to sell up to 50,000 SHS in various parts of the country (see PI 5/2002, p. 10). The government's poverty tariff, expected to remain in place for three to five years, would reduce the monthly SHS fee to 18 ZAR ($2.13).

According to Robert Aitken, planning manager at Nuon RAPS (NuRa), which has a concession in KwaZulu-Natal, the tariff is already a reality.»We were asked by the government to see if we could start it by Feb. 1,« he says. Nuon planned to begin the tariff in mid-November. Aitken says the poverty tariff could increase its sales in the province to as many as 200,000 SHS.

But a source at the Department of Minerals and Energy (DME), which is administering the SHS program, says the funds will not be available until sometime in June, and that part of the poverty tariff will be»conditional.« Wolsey Barnard at the National Electric Regulator, which oversees South Africa's utilities, adds that the amount of 40 ZAR ($4.72) was only for a pilot scheme. He expects the buy-down to be set at 80 percent of monthly fees, or about 46.40 ZAR ($5.48), starting on July 1. Klaus Pritzlaff, financial manager at Solar Vision, which has a concession in the Northern Province, does not foresee any such changes to the amount.»To our knowledge,« he says,»it is still 40 ZAR.«

Perhaps more worrying for Pritzlaff is the current state of negotiations for an increase to the capital subsidy of 3,500 ZAR ($413) per system. A devaluation of the rand led the concessionaires to opt for truncated 12-to-18-month interim contracts in early 2002 (see PI 12/2002, p. 8). Pritzlaff described a Feb. 12 meeting between the concessionaires and a consultant for the DME as»positive.« But NER's Barnard says his agency has not yet received any formal request for an increase.