R15-million up for grabs over next six months for private power generators who sell excess electricity to City of Cape Town

The City of Cape Town on Tuesday announced it would start paying cash to commercial customers with their own embedded generation facilities, who sell their excess power back into the grid.

“The message is clear: If you’ve got kilowatts to sell, we want ’em all. And if you want to be paid cash for your power, now you can be — just tell us if you want it by EFT, e-wallet, SnapScan, or Apple Pay,” said Cape Town Mayor Geordin Hill-Lewis at the city’s first 2023 council meeting on Thursday.

Mayor of Cape Town Geordin Hill-Lewis. (Photo: Gallo Images / ER Lombard)

The announcement comes against the backdrop of Eskom’s rolling blackouts that are affecting businesses and contributing to another year of lacklustre economic growth in the country. Stages 4 and 5 load shedding were implemented from 5am on Thursday.

Cape Town is already able to provide its customers with up to two stages of load shedding relief where possible, thanks to the use of a hydroelectric plant at the Steenbras Dam. It’s the reason Cape Town municipal customers at times have only Stage 2 blackouts while the rest of the country is on Stage 4.

Hill-Lewis told Daily Maverick last week that Cape Town aims to provide its customers with at least four stages of load shedding protection progressively over the next three years.

Read more in Daily Maverick: “Dumped — metros start the move away from Eskom and towards independent power producers”

The city is forging ahead with its rolling blackout protection plan. Last week, the National Treasury granted an exemption from public procurement legislation, allowing Cape Town to pay customers cash for power.

?Important news?:Cape Town can officially start paying people for the power they sell back to the city. Without limit. We’ve got a reply from the National Treasury, giving us the exemption we asked for. This is an NB step on the end loadshedding journeyhttps://t.co/LBiOYKcx2B pic.twitter.com/eu27K8Ndrj

— Geordin Hill-Lewis (@geordinhl) January 24, 2023

Speaking to Daily Maverick during the DA’s “Power to the People” march to the ANC’s offices in Cape Town on Wednesday, Hill-Lewis said: “The City of Cape Town will now pay cash — EFT people for the power they sell back into the grid. Previously we only gave credit… on their municipal bills for that feed-in power; now we’ll actually buy it [for] cash… if you want cash for it.”

To pay cash to residents and businesses feeding into the city’s grid, Cape Town had to ask the National Treasury for an exemption from public procurement legislation that requires competitive bidding for all purchases.

The city also dropped the policy requirement that customers wanting to sell power be “net users” of electricity, which previously only allowed municipal bills to be credited for excess power, with no cash payments.

The National Energy Regulator of South Africa (Nersa) has approved a rate of 78.98c/kWh for this financial year for the city to pay power sellers. Hill-Lewis said the city had decided to add a 25c/kWh incentive tariff on top of this to encourage investment in embedded generation:

“The hope is, of course, that it will incentivise many thousands of people to invest in solar power, and help us stop load shedding in Cape Town over time — which is our ultimate goal.”



The city has a budget of R15-million to pay small-scale embedded generators for their power for the remainder of this financial year, which ends in June.

Meanwhile, the cash-strapped City of Joburg has announced plans to avoid up to three stages of load shedding in the next six months — if it can raise R401-million.

Cash for power

The City of Cape Town has pledged that cash payments to commercial customers will be possible before June, and within the year for any Capetonian with the necessary city-approved generation capacity.

Executive director for energy at the City of Cape Town, Kadri Nassiep, told Daily Maverick the city needed to do a capacity study on its infrastructure to ascertain what amount of energy can be absorbed by its networks “to allow equitable access for all customers”.

The city will immediately roll out the paying of cash for power, says Nassiep, “but there is still a process to follow and commercial customers interested will need to respond via an Expression of Interest, which the city will periodically issue”.

According to Nassiep, customers will need:

• A photovoltaic (PV) or solar power system and inverter, purchased or leased from a reputable installer;


• The reputable installer to apply to the city to have the system approved to connect to the grid;


• The city to install an Advanced Metering Infrastructure (AMI) meter; and


• To be on the correct tariff.

Following this, the city will measure the amount of energy the customer feeds into the grid and the customer will be credited with the small-scale embedded generation (SSEG) tariff and the city’s incentive tariff for each kWh that is fed back into the city grid.

“This will be reflected on the customer’s monthly municipal account,” said Nassiep, and will be “offset against their monthly account (electricity, rates, water, solid waste).”

He says if the customer still has credit after this offset, and the amount is over a set minimum limit, the city will pay this to them.

The AMI which the customer is required to purchase and have the city install, comes at a hefty price — about R11,000.

“As energy will flow in both directions, we require a meter that is able to register import and export energy and we should be able to read the meter remotely.

“The city is aware that the meters are expensive… and is investigating alternative metering options,” Nassiep said. DM