Competition Commission keeping keen eye on solar energy pricing as consumers look for off the grid electricity options

Solar panels are fitted to the roof of a house in California, in the US. File Picture: Reuters.

Solar panels are fitted to the roof of a house in California, in the US. File Picture: Reuters.

Published Jan 23, 2023


Durban - The Competition Commission says they are keeping a keen eye on price gouging and fixing in the solar-energy sector and has urged businesses and consumers who are going off the grid to report incidents to them.

South Africans with the means to do so are exploring solar or alternative energy as the crisis at Eskom deepens and an 18.65% tariff increase granted by the National Energy Regulator of South Africa (Nersa) to the power utility will lead to the cost of electricity increasing.

In a system update yesterday, Eskom said the October 2022 failure of the chimney system at the Kusile Power Station was the major cause of the elevated stages of load shedding.

It said it was working with the government to acquire additional generation capacity from existing operators, both within South Africa and the region.

Prominent South Africans have also backed a team of the country’s top lawyers, who on Monday issued a letter of demand to Public Enterprises Minister Pravin Gordhan over load shedding and to stop the Nersa tariff hike.

Competition Commission spokesperson Siyabulela Makunga said alternative energy was naturally an area of interest to the commission given the energy crisis and the need to ensure these markets are competitive too.

“Where complaints are received, they will be investigated accordingly and action taken if required. If consumers or businesses have concerns, then a complaint can be filed with the Commission via email, [email protected],” Makunga said.

Energy expert Lungile Mashele said while many people were looking for solutions, she wanted to caution those who were looking for solar home systems.

“You need to get a reliable installer, one who is registered as your system needs to have a safety mechanism. We have seen a couple of homes go up in flames and people need to understand that this is a very serious business that they are undertaking – you are basically running your own power plant in your own house.

“You are susceptible to all kinds of dangers, trips and fires that a power station would have.”

She said if there was damage to Eskom or municipal equipment as a result you may be liable for the repairs.

“This also has insurance implications, so if your house is insured, be prepared to pay more and you must be aware that there are inherent risks, especially fire risks, in those kinds of homes.

“Yes, the systems work perfectly and I would definitely recommend them but many who bought them in the past bought them cash or they would finance them through their banks through their mortgages. People now are opting for rent to own or leasing mechanisms and with this you will be paying a fixed amount for a certain period almost like a vehicle.”

She warned that unlike a vehicle, which could continue to be used after the payment period, the problem with UPS or a solar PV system is that after a certain period “the whole thing needs to be scrapped”.

“People who have had solar installations for 10 years have already had to replace batteries and inverters and that is a lot of money.

“With rent to own people need to understand you will pay this company monthly into perpetuity, and if you want to cancel this contract, it comes with heavy penalties as well.”

She advised that these contracts’ terms and conditions must be scrutinised “because there are a lot of people out there who are trying to make money off of solar during this time”.

She said that those buying these systems are told it will last for 20 years and while products carry a manufacturer’s warranty or guarantee for that period, the ongoing load shedding in the country means it is being run differently compared to other countries.

“In Germany people who have installed Solar PV run down their batteries twice a year but we run down batteries three or four times a day so the battery cycle of 5  000 cycles will only get to five or six years if they are lucky.

“People need to be very aware that you are going to spend between R200  000 and R250  000 and in year six, your inverter needs to be replaced, your battery needs to be replaced. The only thing that will be standing up to year 20, if you are lucky, are your PV panels.”

DA MP Kevin Mileham, the party’s spokesperson on energy and minerals, said the party was aware of a few incidents of price gouging.

“The manufacturers have clamped down on the retailers who had been increasing the prices on inverters, UPS and batteries.

“We urge the Competition Commission to watch this sector very carefully.”

IFP leader Velenkosini Hlabisa urged businesses involved in solar to not use the opportunity to benefit themselves by fixing prices.

“We appeal to these businesses not to exploit the people of the country at a time when government has failed them,” Hlabisa said.