The uptake of rooftop solar in South Africa has increased dramatically over the past five or so years, spurred initially by the extreme loadshedding from 2021 to 2024.

Using satellite and other aerial photographic data, a new report by the Public Affairs Research Institute (PARI) estimates that about 5.98-billion kWh of electricity was generated from the total installed rooftop capacity of 3 495 MWp over a one-year period.

The report also estimates that about 30% of potential rooftop solar output is being curtailed, with the highest curtailment levels (almost 758 000 MWh) occurring in the Gauteng metropolitan areas of Johannesburg, Ekurhuleni and Tshwane.

While 52 municipalities currently have policies in place that offer customers the option to feed their surplus electricity back into the distribution grid, this has remained largely theoretical, owing to the onerous and expensive conditions municipalities impose.

For many residential system owners, these additional costs outweigh the financial benefits of selling electricity to the municipality and disincentivise system registration.

Municipalities are thus currently not tapping into what would be a far lower-cost source of bulk purchases than is available from Eskom, whose tariffs have not only surged materially but remain on an above-inflation trajectory.

PARI views this pent-up supply as a real opportunity, especially in Gauteng, where all three metropolitan councils are facing serious cost and sustainability pressures.

The benefit would be enhanced if these municipalities were to incentivise rooftop solar owners to increase the size of their installations, and sell their excess electricity to the municipality at a discount to the Megaflex tariff.

It would be further amplified if that cheap electricity could then be stored in leased battery storage systems for dispatch during the morning and evening peaks, when Eskom tariffs are at their highest.

Under a scenario of a 20% increase in installation size by commercial and industrial sites and a 50% increase in installation size on residential sites, the combined annual savings for Johannesburg, Ekurhuleni and Tshwane would be almost R2.5-billion yearly, the researchers calculate.

A key requirement for capturing these savings, however, lies in municipalities adopting a cooperative stance towards rooftop solar.

Instead, many municipalities are currently largely oppositional to rooftop solar owners, and are seeking to force them onto more expensive tariff structures. In addition, they are also demanding that owners incur system compliance costs, while carrying the full cost of new bidirectional meters.

Against the backdrop of competitive solar-plus-battery production costs and rising electricity tariffs, this is a recipe for grid defection, which PARI describes as the “worst outcome”. This, because municipalities will lose both customers and access to cheap power-producing infrastructure that has been paid for and is being maintained by third parties.

Instead, the paper suggests that it is in the interests of municipalities to incentivise such customers by streamlining system registration, subsidising the bidirectional meters, and allowing rooftop solar owners to remain on existing prepaid billing structures.

With embattled municipalities desperately seeking sustainability wins, these recommendations should not go unnoticed.