Open AccessEstimating the economic potential of PV rooftop systems in South Africa's residential sector: a tale of eight metropolitan cities
Author(s) -
Senatla Mamahloko,
Bansal Ramesh C.,
Naidoo Raj,
Chiloane Lehlogonolo,
Mudau Unarine
Publication year - 2020
Publication title -
iet renewable power generation
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.005
H-Index - 76
ISSN - 1752-1424
DOI - 10.1049/iet-rpg.2019.0946
Subject(s) - metropolitan area , internal rate of return , photovoltaic system , payback period , tariff , investment (military) , net present value , business , environmental economics , electricity , rate of return , return on investment , finance , natural resource economics , economics , agricultural economics , engineering , geography , production (economics) , electrical engineering , archaeology , politics , international trade , law , political science , macroeconomics
The cost of producing electricity with solar photovoltaic (PV) has decreased drastically in the past 10 years, so much that the installed PV capacity has increased exponentially between 2010 and 2018. South Africa is endowed with a technical potential of 72 GW for PV rooftop systems, but the economic potential is largely unknown. As a result, the integrated resource plan assumes that an annual installation of 200 MW of distributed generation will be made between 2018 and 2030. This study evaluates the economic potential of rooftop PV systems in the residential sector within metropolitan cities in South Africa using financial metrics. The important financial metrics used to qualify an investment are net present value, internal rate of return (IRR) and payback period. An investment is expected to pay itself back in less than 10 years with a high rate of return (IRR). Households are classified into living standards measure so that it is easier to map customers to related tariffs. Using this method, the eight metropolitan municipalities will have PV economic potential of 11 GW in 2019 and 22.7 GW by 2030 if the current tariff grows at 5% and the tariff structure does not change.