Outdated thinking and reactionary rules hold back SA’s electricity supply

Such as the limits on the size of domestic rooftop solar PV installations.
The exclusion of lower-income households with prepayment electricity meters from the benefits of becoming producers and consumers of electricity presents serious potential socio-political implications in the future. Image: Waldo Swiegers, Bloomberg

When it comes to domestic, grid-tied, rooftop solar photo-voltaic (PV) systems in South Africa, as with so many other aspects in the country’s electricity supply industry, outdated thinking and reactionary rules are holding back the supply of electricity in misguided efforts to protect the incumbent monopolies.

Even municipal electricity distributors in South Africa considered to be progressive and forward thinking, such as the City of Cape Town, have ridiculous, self-serving rules when it comes to domestic solar PV systems that feed electricity back into the grid. Other municipal and Eskom electricity distributors are no different.

The outdated Eskom and municipal electricity standard – known as ‘NRS 098 2-1’ and used as the rulebook for small-scale embedded generation (SSEG) – limits the size of grid-tied, rooftop solar PV systems in residential installations. For example, a solar PV system on a house with a 60A single-phase supply is limited to 3.68kW. Similarly, other limits apply to residential installations with 40A, 80A or 100A single or three-phase supplies.

Apparently, the 3.68 kW-limit was calculated on the basis that if every single house connected to a final distribution transformer had a 60 A single-phase supply, and all were to install identically sized grid-tied solar PV systems, then 3.68 kW would be the size per solar PV system above which voltage rise may become a problem.

Read: My planned solar system upgrade

Obviously, this was and still is a completely absurd and unrealistic assumption for such a calculation in the first place. Furthermore, the NRS standard was written at a time when smaller inverters for rooftop solar PV systems did not necessarily provide voltage regulation. These days, however, even small inverters have voltage control facilities, thus obviating any need for concerns about voltage rise.

Therefore, there is absolutely no technical need for such unrealistic restrictions on the size of domestic grid-tied, rooftop, solar PV installations on single or three-phase supplies, and grid-tied solar PV sizes three times higher could be comfortably accommodated, with the right approach.

Feed-in tariffs, but not for customers with prepayment meters

On the one hand, the use of pre-payment electricity meters to facilitate revenue collection and revenue protection is being pushed by Eskom and municipal electricity distributors, particularly for lower-income domestic installations.

However, the benefits of compensation for electricity generated back into the grid from rooftop solar PV installations are specifically excluded and are not available to domestic customers with prepayment electricity meters.

The reality is that the prepayment meters currently provided by Eskom and municipal electricity distributors in South Africa are largely outdated, and anything but smart.

Eskom and municipal prepayment meters have problems in accommodating even the existing inclined block tariffs properly, let alone being able to handle time-of-use tariffs, or feed-in tariffs for grid-tied solar PV systems.

The exclusion of lower-income households with prepayment electricity meters from the benefits of becoming ‘prosumers’ (producers and consumers of electricity) presents serious potential socio-political implications in the future.

Absurd limits on compensation via feed-in tariffs

There are truly absurd limits in place by both Eskom and municipal electricity distributors on compensating domestic electricity customers with grid-tied solar PV systems for electricity supplied back into the grid.

Eskom and municipal distributors have a rule that says a domestic customer with solar PV system must be a net consumer of electricity over a one-year period. A net consumer is defined as a customer who purchases (imports) more kWh of electricity than the customer exports (sells) into the grid over any 12-month period.

Read: World’s largest solar tech leader partners with SA PV panel maker

Furthermore, the kWh price (R/kWh) for electricity supplied by the customer into the grid is only about one third of the kWh rate for grid electricity supplied by the distributor to the customer.

This means that, over a year, the energy billed in rands for electricity supplied to a customer can only be offset or compensated (in rands) to a maximum of one third by electricity supplied back into the grid by a customer.

Thus, over a year, a customer would need to pay the grid electricity supplier at least three times more in rands for electricity supplied from the grid than the customer could ever be compensated by supplying electricity back into the grid. This makes absolutely no sense and is irrational.

Eskom, the municipal electricity distributor and customers would all be ‘in the money’ (win-win-win) if domestic customers could supply much more electricity back into the grid.

For the municipality, the price of the additional electricity (R/kWh) purchased from domestic customers is less than the cost of electricity (R/kWh) purchased from Eskom. Thus, the municipal electrical energy bill from Eskom would be reduced more than the additional cost of compensating customers feeding electricity into the municipal grid.

Read: Why Eskom wants to make three big changes to its tariff structure

Eskom’s variable cost of generation, transmission and distribution of electricity would be reduced. Eskom’s coal burn, and therefore its CO2 emissions, would also be reduced, thus reducing the carbon footprint of both Eskom and the municipalities.

Finally, Eskom’s burden in meeting electricity demand, which it is clearly unable to satisfy as evidenced by regular load shedding during daylight hours, would be reduced.

The irrational, reactionary and monopolistic tendencies of Eskom and municipal distributors need a rude wake-up call. The world of electricity supply is changing fast, and it is time for customers and ‘prosumers’ to start calling the shots.

© Copyright 2021 – EE Business Intelligence (Pty) Ltd. All rights reserved. This article may not be published without the written permission of EE Business Intelligence.

Chris Yelland is managing director of EE Business Intelligence.


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What grinds my gears is : Our local municipality installed very nice bidirectional smart meters recently when we went over from wheel meters to prepaid meters, but they are using them just a standard one directional meters with no SSEG plans :/

So in the daytime after my batteries are full I am left with excess power that has nowhere to go…

That is a very valid point PJJ, domestic users have the capacity to help with electricity but the rules of the municipality is punishing them, so this readily available capacity of electricity just goes to waste.

I sincerely hope that your “excess power which has nowhere to go ” doesn’t feed back into the grid and kills some poor unsuspecting electrical technician doing repairs who were told that “the power has definitely been switched off in that area”.

My inverter is NRS 097-2-1 compliant meaning it has both a active and a passive check to ensure proper islanding.


Grid-tied inverters don’t work like that. They are transformerless : literally cannot invert solar unless it is connected to an AC source.

Most can be controlled for whether and/or how much to export, but cannot export anything when grid is down.

No Chris-this is only half the problem.

Stealing, Corruption, BEE, downright incompetence, poor leadership and management, a monopoly and a series of disgraceful ANC cabinet Ministers overseeing Eskom is the real reason for the problems.


Solar panel worshipers like Chris are blinded by reality and only spew R/kw nominal values as a simplified solution to all in SA..

Yet academic Chris is quiet on the cancer that is the REAL problem in ESKOM.; Why not fix the real problem??

No that is too difficult, he might just have to utter some “unpleasant” un-PC words ..

Hmmm … “Outdated thinking and reactionary rules hold back SA’s electricity supply?” I think that applies to the entire economy.

But more importantly for those staying here, how can it be changed?

In an old fashioned democracy such issues can be raised with your MP. Many people can lobby many MP’s and wheels can start to turn. Unfortnately SA boasts a new and wonderous system that has no such functionality. But if you can lubricate things with lots of large brown paper envelopes there is a small chance that things can be made to appear to happen.

Thanks Chris, I always enjoy your articles, as I know you have an excellent knowledge of the electricity industry.

I have made calculations on municipal purchases from Eskom and the profits made on sales for more than 25 years and just want to mention two things:
Some municipalities still have very well run electricity departments and make a good profit from the sales of electricity. Fact is, the saving on the Eskom account due to lower consumption will not counter the loss of profit on lower sales. This will force the municipality to raise the cost of other municipal services.
In a well run and well electrified town, where everybody pay for their electricity, this is the only service where the whole town makes a contribution. All other services and taxes are normally paid by a very small percentage of a town’s people. Lower sales will increase the burden on that small group.
While I am at it, just another concern. All invertors are not of the same quality. I am concerned about the harmonics these invertors feed into the system, as harmonics play a large role in the quality of supply. Maybe you know someone who are doing, or can do, some research on that.

Chris, you are correct when you say municipal meter technology is outdated and not smart. The problem is, to replace them is very expensive and I know municipalities can hardly
afford to replace old networks, let alone perfectly working meters.
Before my retirement four years ago, I have listened to numerous smart meter sales pitches, offering the municipality wonderful deals on smart meter replacement options. However, if you know a little bit about finance cost, return on investment and break even analysis, you find that the only winner in these schemes are the meter manufacturers. As I said, that was four years ago, maybe there are better options available now. If you find one, share it with the municipalities via your AMEU relationship.

To add to what Auretha says, councils are not for-profit companies. I am not sure how Mr Yelland thinks councils will fund their acitivities if they pay royal tariffs to solar users for exports.

I am very pro solar – my house is 2/3 solar and my factory ½ solar.

But bottom line if your council made R100m MARGIN on electricity sales it must continue making that AMOUNT of MARGIN or hike fees elsewhere!

The solution is that solar exporters are paid a fee that is basically in line with what council pays Eskom, not what council charges users!

The idea is not to create extra profit centers for solar rooftop owners. At about 85c average things work out fair.

Also, as far as I know the NRS size rules on shared feeder networks is not just about voltage. You can’t allow ten Johnies to hook up ten 1MW factory rooftop systems that all reverse feed into a 5MW transformer on a sunny Sunday. That’s when things go woof bang

I agree, Municipalities should not have to pay a premium to rooftop PV exporters, they should make the same margin per kWh as they would buying from Eskom.

The Municipality can still profit on the same margin, and it also has the added benefit of potentially reducing the Municipalities demand charges from Eskom. (And maybe in some cases avoid demand penalties)

PJJ – if you mean when they resell my exported solar electron they should make the same c/kWh then yes we are same page.

With solar it is hard to avoid those peak demand charges. There is inevitably that one damned day in the month where weather and loads conspire against you.

But I am figuring a plan for that 😉

@Johan yes we are on the same page 🙂

I am actually surprised SA hasn’t moved residential to a TOU tariff structure years ago, TOU would send the proper price signals to end consumers and they would move loads to off peak to ensure a cheaper rate and relieve the system of those nasty peaks.

Just this morning I noticed my washing machine has a timer function to start a cycle after X hours / minutes, it makes perfect sense for me to load the washing and schedule a wash for when the power is cheap and abundant, same with hot water heating, if we could just implement TOU I think it would already solve so many other problems.

Johan, I agree with Chris, and yourself, that renewable is the way to go and we must find better solutions to accelerate it.
However, if you know how municipal networks to low cost housing with prepayment meters are designed (Integrated National Electrification Programme directives – Eskom even have networks designed for 2 Ampere connections), then I do not think it is wise to start feeding into them from all sides.
Until we find better solutions, blaming the municipalities, and Eskom, will not solve much. They have to carry on delivering services and for that they need funds. They have no choice but to protect their revenue sources.


2A supplies! That’s one good solar panel nowadays…

The people that drew up 98 for small SSEG are not stupid even if they were a tad conservative.

Instead of 50 sizeable electricity departments all battling their internal politics and misunderstanding and non-comprehension for 5000 man hours each it would be useful if a national exercise put out SSEG rules for all. (After public consultation)

You WILL allow abc rules, you WILL do it like this. I don’t get why we don’t have prescribed tariffs for say 3 sizes of councils (maybe per their Eskom tariff scheme)

AND they must make Eskom Distribution charge the same as councils. The current system where people ½ mile apart but the one on Eskom and the other on council pay 30% different for nationally subsidized electricity has to stop. In effect my taxes are subsidizing my competitor’s cheaper Eskom Distribution tariff.

Eskom’s GEN tariff for solar feed-in is probably the most liberal in SA

The “Progressive” Stellenbosch municipality interpret the 3.68 kW limit to be the theoretical sum of the solar array. In other words if you want to feed in to the grid you can not have on your rooftop more panels than the 3.68kw. Regardless of the inverter can limit it self to feeding in its irrelevant.

All the news of Stellenbosch going off Eskom with a collaboration effort between University and CSIR but yet Stellenbosch Municipality engineering(R Louw) has completed lacking understanding of current technologies

Hannes : you should ask their engineers to read the NRS.

It deals with the grid facing AC kVA. You can have 20 kVA solar DC as long as it is throttled at 3.6 AC export you are legal.

This is part of why we need National rules. You WILL not you MAY….

I am honestly hoping that Stellenbosch municipality engineer R Louw mis interpretation of the 3.68kw limit is actually deliberate and not an indication of gross incompetence. The implementation that they limit the installation solar array is that during winter a 11x330w array can only generat about about 7kwh which is a 1/4th of the summer potential.

End of comments.



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