CHOOSING THE RIGHT RENEWABLE ENERGY SOLUTION FOR YOUR SMALL BUSINESS
Even though many small businesses – especially those in the hospitality sector – have been brought to their knees by the pandemic, it seems that the very real possibility of further load shedding is yet another challenge that those who are determined to survive will have to consider.
Right now, the lights are on – but most South African businesses are all too aware of how vulnerable they are to Eskom’s unpredictable decisions to flip the switch. Often, these announcements are made the day before, leaving business owners with little time to plan.
According to the 2020 CSIR Energy Report, South Africa will likely face an energy shortage for at least the next 18 months while the South African Reserve Bank affirms load shedding is at its worst this year with the total gigawatt-hours shed surpassing the 2019 record in August.
“The reality is that power interruption is hitting small and medium-sized businesses particularly hard. The power outages cause productivity declines which translate to lost revenue. Renewable energy is a sustainable solution for the future,” says Kyle Durham, Head of Alternative Energy Solutions at FIRST National Bank.
Wise counsel from Durham is that, for a business to survive and thrive in the years ahead, it is essential to look further ahead than the next Eskom crisis and invest in an alternative power solution that provides a solution well into the future.
That way, businesses will also avoid far more than the immediate inconvenience of load shedding – including tariff increases which are an inevitable reality as Eskom seems unable to recover lost monies and collateral damage in the form of equipment that has been damaged due to surges when power is suddenly restored.
Given that infrastructure is aging and that skills need to upgrade, maintain and even repair outages is also in short supply, especially in the private sector, long term planning will also need to factor in increased down time, even when load shedding has been put on hold.
Durham provides the following advice for choosing a renewable energy solution:
Selecting a supplier:
The first thing is to search for a reputable supplier. In doing so, it’s best to choose a solar installer once you’ve reviewed their certifications, licenses, track record and reputation in the market. Wido Schnabel, chairman of industry body, the South African Photovoltaic Industry Association (SAPVIA), says one ideally wants a supplier with a strong South African presence.
“This means you are looking for a company with an office and staff in South Africa so that you know you will have strong after-sales support,” he advises.
Schnabel suggests that you appoint an independent consultant at the outset to guide you through the process. “FNB’s Alternative Energy Solutions can help in this respect, in terms of guiding you through the process,” Durham says. Just as you would get three quotes before taking your car in for repairs, you should get three quotes from three different suppliers before you choose a supplier.
However, Schnabel warns that this is where your independent consultant plays a big role. “You need to compare apples with apples. Some suppliers might come in with a vastly cheaper quote and that might be because the equipment they want to use is inferior to the equipment that the higher-priced supplier is quoting you on,” he says.
Choosing the right equipment:
A holistic renewable energy solution will include solar panels, an inverter and a battery. Solar panels take solar energy and make it into direct current (DC) power. The inverter’s job is to convert that DC power into the alternating current (AC) electricity that can be used in your business. There are two types of inverters: string inverters and module-level power electronics (MLPEs). MLPEs are generally more expensive, but they can also be more efficient. MLPEs are a good choice if your solar energy system may be slightly shaded or can’t be installed at the best angle.
The reality is that power interruption is hitting small and medium-sized businesses particularly hard. The power outages cause productivity declines which translate to lost revenue. Renewable energy is a sustainable solution for the future.”
This is a long-term purchase and the equipment usually carries a 25 to 30-year warranty. Find out what the warranty is on the equipment. Like all things, solar panels degrade and become less efficient over time. Many manufacturers will guarantee that the power production of their panels will not fall below a certain threshold over twenty-five years.
The supplier should be able to remotely log on and see how much energy is being produced, check that the inverter is functioning correctly and see if the system has logged any faults. While you don’t need to service the equipment, it will need to be cleaned regularly. “I had a client once who complained that the equipment wasn’t performing as well as they thought it would. When I drove past, I immediately saw that the panels were covered in a thick layer of dust. A simple cleaning with water and a hard broom and the performance improved by 20%,” says Schnabel.
You need to compare apples with apples. Some suppliers might come in with a vastly cheaper quote and that might be because the equipment they want to use is inferior to the equipment that the higher-priced supplier is quoting you on.”
Monitoring your investment outcomes:
When you select your supplier or installer, they should start by doing an energy analysis. A power meter is placed into the distribution board to measure the profile of your energy usage. This will tell your installer what your peak loads are, what your permanent loads are and what your daily power usage levels. The supplier then uses your GPS co-ordinates and reviews historical and measured data and satellite data to determine what solar radiation levels you are likely to get.
“Then the installer can run a simulation to tell you how much energy you are likely to get each month and what your cost-savings benefits are likely to be,” Durham explains.
“The expected capital cost of a Solar Plant is linked to the current energy requirements and can vary from R45 000 to in excess of R10 000 000. However, the long-term benefits in terms of cost-saving and business sustainability far outweigh the upfront costs. FNB Alternative Energy Solutions offers bespoke finance solutions to help fund these capital costs. Helping businesses maintain their sustainability is going to be a key building block when it comes to rebuilding our economy,” he concludes.