What is net metering?

It is a billing system that benefits people who generate their own electricity, typically through solar panels. Here’s how it works:

  • Solar panels generate electricity during the day: You use some of this electricity to power your home.
  • Excess electricity goes to the grid: If you produce more electricity than you use, the extra power flows back into the power grid.
  • Credits for excess electricity: Your meter will run backwards, crediting you for the electricity you contribute to the grid.
  • Offset electricity bill: You can use these credits to reduce your electricity bill when you use more power than you generate, like at night.
Net metering

Here are some of the benefits of net metering:

  • Cost savings: You can significantly reduce your electricity bills by offsetting your power usage with solar energy.
  • Clean energy: Net metering promotes the use of renewable energy sources like solar, helping to reduce reliance on fossil fuels.
  • Return on investment: Being able to sell excess solar power back to the grid can help you recoup the cost of installing solar panels more quickly.

There are two main ways to cash in on solar power in South Africa currently:

    • Sell excess electricity back to the grid (Cash for Power program):
    • This program is specifically offered by the City of Cape Town.
    • Home-owners and businesses with grid-tied solar PV systems can participate.
    • Excess solar energy produced during the day is fed back into the grid.
    • You receive credits towards your municipal bill, and once the bill reaches zero, you can get cash payouts for the remaining excess electricity.
    • Save money on your electricity bill:
    • Even without net metering, installing solar panels can significantly reduce your electricity consumption.
    • The solar panels generate electricity during the day, offsetting the need to purchase power from the grid.
    • This leads to substantial cost savings on your monthly electricity bills.
    • South Africa also offers tax breaks for businesses who install solar panels, further reducing the upfront cost.

Is Net Metering available throughout South Africa?

Net metering isn’t widely available throughout South Africa yet, but it is on the horizon. Here’s the current situation:

  • National framework in development: The National Energy Regulator of South Africa (NERSA) is working on a national legal framework for net metering
  • Limited programs exist: Some municipalities offer limited net metering programs or “offset tariffs” where you get a credit for excess electricity fed back into the grid.
  • Future potential: The expectation is that net metering will become more widespread as regulations are finalized.