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Renewable energy solutions can drive down costs post lockdown

Kyle Durham, Head of Alternative Energy Solutions at FNB Business

July 2020: Given the anticipated strain on business operations due to power interruptions over the winter period, coupled with the financial impact of the Covid-19 pandemic, businesses resuming activities, in line with the easing of lockdown restrictions and the new normal, cannot afford to be caught off-guard without a reliable alternative energy solution in place.

"Our customers and the economy, particularly the manufacturing sector and other sectors will have to start looking at alternative energy again to ensure uninterrupted business. The cost of losing business time has never been more urgent than now as thousands of businesses start up again with the easing of the lockdown," says Kyle Durham, Head of Alternative Energy Solutions at FNB Business.

"In addition to the prevailing challenges of power interruptions pre-Covid-19, energy experts were already forecasting an above inflation electricity price increase and there remains notable uncertainty regarding electricity price increases into the future. This means from an energy cost point of view, particularly in a depressed economy, businesses also need to be looking at every way they can save costs. Covid-19 has just highlighted the importance of having energy certainty and reducing costs wherever possible," Durham says.

The long-term benefits of implementing alternatives such as solar renewable energy solutions certainly outweigh the costs. "For example, an average-sized retail property would require a Solar Plant with a size of approximately 500kWp costing approximately R4.7m. However, the energy savings based on current electricity prices alone would amount to just over R1 million with the cumulative savings over 10 years projected at R11.8 million. Moreover, the business would also benefit from the S12B tax allowance which includes a 100% accelerated wear and tear deduction in the first year," Durham explains.

He says one of the most effective solar solutions for most businesses would be a grid-tied solution. Grid tied systems consist of two key components - solar panels and a dedicated grid-tied inverter. All the electric power generated by the solar panels feeds through a mains-synchronized inverter directly into your distribution board and offsets the power you would normally consume from Eskom or the municipality.

"This means you are trying to use your solar plant in such a way that by noon on a sunny day, the plant is generating maximum electricity and as you go towards the evening and mornings, you revert to using municipality or Eskom electricity. You can save 30 to 50% on your electricity bill," he adds.

A hardware client that had extremely limited grid capacity used a grid interactive solution. In this case, it acts as a normal grid-tied system to reduce the instantaneous power required from the municipal feed point in order to supplement the shortfall experienced. The battery system is programmed to supplement the solar system in scenarios when low irradiation levels are experienced, for example, during early mornings and late afternoons, as well as cloudy times.

"The system cost of R3.8 million allowed for a R300 million business development, with the knock-on effect of significant job creation for the local community at the large retail hardware store," concludes Durham.

For more information contact:
FNB Corporate Communications
Lebogang Moyana: lebogangmelody.moyana@fnb.co.za or 078 655 1145