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Why solar isn’t soaring

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Given the current power challenges South Africans face, it makes sense for many to make use of rooftop solar panels. However, the uptake has been really slow due to the installation price, ROI and problems linking the panels into the current electricity grid, writes KEVIN NORRIS and DAVE SMITH of the Jasco Group.

Given the current power challenges in South Africa, as well as a growing trend toward solutions for sustainable electricity, solar technology as a source of energy supply has become a hot topic, particularly for organisations wishing to reduce their reliance on utility power sources. Rooftop solar photovoltaic (PV) plants can help organisations generate their own power, and using grid tie inverter systems enables them to feed excess generated power back to the utility for use elsewhere. However, despite the benefits of such systems, there are two common challenges that have emerged. Firstly, PV plants are a costly investment, and the Return On Investment (ROI) has in the past taken many years to realise, although this is changing as the cost of installation reduces and electricity tariffs continue to increase. This makes obtaining funding for such systems difficult. Secondly, there remain several issues with the connection of solar plants to the main grid, which has slowed the uptake of these solutions. Addressing these challenges is key to harnessing the power of the sun as an alternate, sustainable energy source.

Grid tie solar systems are the simplest and most cost effective method for utilising solar energy as a replacement for day-to-day power requirements. On a very basic level, the grid tie invertor converts the direct current (DC) power generated by solar panels, into the alternating current (AC), and injects this AC current into the existing load. Any excess energy is then fed into the power distribution network. The inverter is also able to ensure that energy requirements are drawn from available solar power first, and only utilise utility supply should there be a solar shortfall. This system does not necessarily require a battery for energy storage, although this will extend functionality, so the installation is very simple and efficient, and maintenance is low. However, while the cost of manufacturing solar PV panels and grid tie inverters has reduced over the past few years, as a result of increased demand, greater economies of scale and technological advancements, solar remains a costly solution to implement. The high cost of raw materials and the high-tech conditions required for the manufacture of components keep these solutions out of reach of the average homeowner or business.

Justifying this investment is often one of the biggest challenges to the implementation of solar power solutions, and obtaining loans and funding is typically a difficult sell. ROI takes a few years to realise, and the investment will only typically pay for itself within six to 10 years. The rate of return is dependent on a number of factors, including the type of installation and the existing tariff with the utility. However, what needs to be kept in mind is that solar PV systems have a predictable performance curve of 25 years and a usable life of 35 years. In addition, using a grid tie inverter system, homeowners and businesses will one day be able to feed excess power back to the grid, either offsetting this against utilisation costs or selling this power to the utility provider. PV systems therefore should not be seen as a depreciating asset. They are in fact an asset that not only reduces current costs, but in the long run could be a significant income generator for the owner.

To quantify this value is a relatively simple mathematical exercise with the assistance of financial models. In 2015 the average cost of electricity per kilowatt-hour (kWh) is similar to the Lifecycle Levelised Cost of Energy (LLCE) of a typical grid tie system at around R1.00 per kWh. This means that, calculated over the complete guaranteed performance lifespan of the panels (approximately 25 years), the cost per kWh from a solar PV system will be similar to the municipal cost in 2015. Going forward the cost of electricity from the utility is very likely to increase significantly year on year, while the cost of the installed PV system will remain at its installed price plus the minimal cost of maintenance. If you look at this over the next 10 years, your cost of solar generation would be around R1.00 per kWh, while the utility cost is forecast to be as high as R3.50 per kWh.

This same trend is likely to continue over the lifespan of the solar PV system. If you project these increases over the 25-year period, the cost difference between now and then would be significant. Effectively, within this period, the solar PV solution could still be generating electricity at R1.00 per kWh, whereas by that stage the cost of utility power will doubtless have increased many times. It is these future differences in the cost of energy between the utility costs and the fixed solar PV cost that should be recognised as part of the long-term sustainability of owning such an asset. Additionally, in most cases the asset is attached to a building and would result in improved valuation of the building. Not only does this have a positive financial implication, it also has an environmental implication, especially when one considers the Carbon Tax that will be levied as of 2016. The only way to negate the carbon tax is to either recycle or produce “Green kWh” from a renewable source like solar PV.

In order to drive adoption of solar PV solutions, it is necessary for financial institutions to recognise their value and assist businesses and homeowners with funding these systems. Forward-thinking financial institutions should look to leverage the security of a loan for solar PV power against the asset itself, as it will pay for itself many times over in years to come. The asset could also be recognised as part of the building itself and be financed utilising an extension of the building bond. In addition, government needs to come on board by assisting financial institutions with tax rebates for their efforts in financing Solar PV systems. This is sound strategy, as by funding these systems, financial institutions are contributing to the overall reduction in carbon output and, more importantly, helping to resolving the country’s current energy shortages.

In addition to funding, connecting to the utility remains a challenge. One of the most pressing issues is the nature of pure solar solutions (without energy storage capability), in that they are only able to produce energy during daylight hours, and the energy must be used or dumped. For the majority of residential applications where nobody is at home during the day, this generated power will be wasted if a solution to feed this power back into the grid cannot be resolved. Connection codes therefore need to be finalised, and metering for two-way energy flow needs to be implemented. It is also important to find a solution to the problem of optimising the use of all renewable energy generated to the advantage of both the end-user and the utility providers.

The concept of net metering, whereby users sell their excess renewable energy back to the utility for credit and utilise these credits when the renewable source experiences shortfall (such as at night when there is no sun to power solar PV systems) is one that has great potential to benefit all parties concerned. For most residential applications, this form of energy trading works well. Some utilities may limit the amount of energy you can sell back for credits to the amount of utility energy used (i.e. if you use 2,000 kWh per month, than you may only sell back a maximum of 2,000 kWh per month). Another system would be to annualise this amount, enabling owners to make better use of the credits throughout the year, such as in winter where generation may not match overall consumption.

Theoretically, users could manage consumption and generation of energy to a zero balance and not have to spend a cent on energy from the utility for the year. This idea in principle is appealing, particularly for consumers and business, however for utilities this could cause problems. If renewable energy customers are not paying what they used to pay for electricity, but rather supplementing their own power generation with utility power, how does the utility find revenue to pay for the maintenance of the generation, transmission and distribution network the entire system uses? Feed in tariffs have been suggested as one solution to this problem, whereby the utility purchases the excess energy from providers, while users still purchase utility power, and there is no obligation to consume at the same rate as you sell energy.

Regardless of the challenges involved, solar PV remains the most viable and cost effective alternate energy source for South Africa, a country that experiences significant hours of sunshine for much of the year in the majority of its regions. If these problems can be satisfactorily resolved and solar becomes a mainstream power generation source, not just for the utility but for business and homeowners too, the currently bleak power prospects of South Africa may have a brighter future after all.

* Kevin Norris, Consulting Solutions Architect, Renewable Energy, and Dave Smith, Managing Director, Renewable Energy, The Jasco Group

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Millennials turning 40: NOW will you stop targeting them?

It’s one of the most overused terms in youth marketing, and probably the most inaccurate, writes ARTHUR GOLDSTUCK

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One of the most irritating buzzwords embraced by marketers in recent years is the term “millennial”. Most are clueless about its true meaning, and use it as a supposedly cool synonym for “young adults”. The flaw in this targeting – and the word “flaw” here is like calling the Grand Canyon a trench – is that it utterly ignores the meaning of the term. “Millennials” are formally defined as anyone born from 1980 to 2000, meaning they have typically come of age after the dawn of the millennium, or during the 21st century.

Think about that for a moment. Next year, the millennial will be formally defined as anyone aged from 20 to 40. So here you have an entire advertising, marketing and public relations industry hanging onto a cool definition, while in effect arguing that 40-year-olds are youths who want the same thing as newly-minted university graduates or job entrants.

When the communications industry discovers just how embarrassing its glib use of the term really is, it will no doubt pivot – millennial-speak for “changing your business model when it proves to be a disaster, but you still appear to be cool” – to the next big thing in generational theory.

That next big thing is currently Generation Z, or people born after the turn of the century. It’s very convenient to lump them all together and claim they have a different set of values and expectations to those who went before. Allegedly, they are engaged in a quest for experience, compared to millennials – the 19-year-olds and 39-olds alike – supposedly all on a quest for relevance.

In reality, all are part of Generation #, latching onto the latest hashtag trend that sweeps social media, desperate to go viral if they are producers of social content, desperate to have caught onto the trend before their peers.

The irony is that marketers’ quest for cutting edge target markets is, in reality, a hangover from the days when there was no such thing as generational theory, and marketing was all about clearly defined target markets. In the era of big data and mass personalization, that idea seems rather quaint.

Indeed, according to Grant Lapping, managing director of DataCore Media, it no longer matters who brands think their target market is.

“The reason for this is simple: with the technology and data digital marketers have access to today, we no longer need to limit our potential target audience to a set of personas or segments derived through customer research. While this type of customer segmentation was – and remains – important for engagements across traditional above-the-line engagements in mass media, digital marketing gives us the tools we need to target customers on a far more granular and personalised level.

“Where customer research gives us an indication of who the audience is, data can tell us exactly what they want and how they may behave.”

Netflix, he points out, is an example of a company that is changing its industry by avoiding audience segmentation, once the holy grail of entertainment.

In other words, it understands that 20-year-olds and 40-year-olds are very different – but so is everyone in between.

* Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter and Instagram on @art2gee

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Robots coming to IFA

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Robotics is no longer about mechanical humanoids, but rather becoming an interface between man and machine. That is a key message being delivered at next month’s IFA consumer electronics expo in Berlin. An entire hall will be devoted to IFA Next, which will not only offer a look into the future, but also show what form it will take.

The concepts are as varied as the exhibitors themselves. However, there are similarities in the various products, some more human than others, in the fascinating ways in which they establish a link between fun, learning and programming. In many cases, they are aimed at children and young people.

The following will be among the exhibitors making Hall 26 a must-visit:

Leju Robotics (Stand 115) from China is featuring what we all imagine a robot to be. The bipedal Aelos 1s can walk, dance and play football. And in carrying out all these actions it responds to spoken commands. But it also challenges young researchers to apply their creativity in programming it and teaching it new actions. And conversely, it also imparts scholastic knowledge.

Cubroid (Stand 231, KIRIA) from Korea starts off by promoting an independent approach to the way it deals with tasks. Multi-functional cubes, glowing as they play music, or equipped with a tiny rotating motor, join together like Lego pieces. Configuration and programming are thus combined, providing a basic idea of what constitutes artificial intelligence.

Spain is represented by Ebotics (Stand 218). This company is presenting an entire portfolio of building components, including the “Mint” educational program. The modular system explains about modern construction, programming and the entire field of robotics.

Elematec Corporation (Stand 208) from Japan is presenting the two-armed SCARA, which is not intended to deal with any tasks, but in particular to assist people with their work.

Everybot (Stand 231, KIRIA) from Japan approaches the concept of robotics by introducing an autonomous floor-cleaning machine, similar to a robot vacuum cleaner.

And Segway (Stand 222) is using a number of products to explain the modern approach to battery-powered locomotion.

IFA will take place at the Berlin Exhibition Grounds (ExpoCenter City) from 6 to 11 September 2019. For more information, visit www.ifa-berlin.com

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