POWERING DEVELOPMENT A PATHWAY TO INTEGRATING ROOFTOP SOLAR PV INTO MUNICIPAL ELECTRICITY DISTRIBUTION

The report examines the financial and operational crisis facing South African municipal electricity distribution, characterized by rising bulk costs from Eskom and a massive infrastructure maintenance backlog. It proposes that municipalities leverage the growing amount of behind-the-meter rooftop solar PV—estimated at 3,495 MWp as of December 2024—to reduce reliance on expensive bulk purchases. By purchasing curtailed excess power and deploying leased BESS for peak demand arbitrage, municipalities could significantly increase operating surpluses to fund infrastructure renewal. The report specifically analyzes the City of Johannesburg, arguing that rooftop solar is not the primary cause of its revenue decline—which is instead driven by high technical and non-technical losses—and warns that punitive policies toward solar owners may accelerate grid defection.

• South Africa's municipal electricity distributors are in a precarious financial state, with aggregate deficits of approximately R24bn over the most recent six years (2017-2024). This is driven largely by bulk purchase costs from Eskom, which accounted for 85.5 per cent of total municipal electricity revenue in the 2024/25 financial year.
• There is a critical infrastructure maintenance backlog in municipal electricity distribution estimated between R150bn and R200bn, resulting from decades of under-investment. This has led to frequent unplanned outages, with 2025 data for Gauteng showing an average of six to nine outages per household per month.
• As of December 2024, there was an estimated 3,495 MWp of installed rooftop solar in South Africa, generating approximately 5.01 billion kWh annually from residential, commercial, and industrial categories. Roughly 30 per cent of this potential output (approximately 1.1 billion kWh) is curtailed annually.
• Municipalities could achieve significant savings by purchasing curtailed rooftop solar power, as feed-in tariffs are lower than Eskom's bulk rates. For the top ten municipalities, these savings were estimated at R1.073 billion in 2025, potentially rising to R3.492 billion by 2035 as Eskom costs increase.
• Integrating Battery Energy Storage Systems (BESS) leased from independent power producers (IPPs) would further increase savings through peak demand arbitrage. Municipalities on Eskom Megaflex tariffs could save over R1 million per annum per 1MW/2MWh of BESS installed.
• The City of Johannesburg (City Power) is in severe financial distress with a net loss of R4.4bn and a net overdraft of R15.6bn. The report finds that electricity losses (technical and non-technical) are the primary driver of this crisis, reaching approximately 34 per cent, which is far higher than the 15 per cent international average.
• The report disputes the claim that rooftop solar is the main cause of declining municipal revenues. In Johannesburg, it argues that the substitution of electricity with gas for water and space heating, along with high electricity losses, are more significant factors.
• Punitive municipal policies—such as forcing solar owners from prepaid to more expensive postpaid time-of-use tariffs—risk triggering 'grid defection,' where users leave the grid entirely, causing municipalities to lose both revenue and access to cheap third-party infrastructure.
• Encouraging the expansion of existing residential solar installations could yield massive savings. A scenario involving a 20 per cent increase in C&I and a 50 per cent increase in residential installation sizes could save Johannesburg, Ekurhuleni, and Tshwane nearly R2.5bn per annum.

APA

Ledger, T., & Mallinson, C. (2026). POWERING DEVELOPMENT A PATHWAY TO INTEGRATING ROOFTOP SOLAR PV INTO MUNICIPAL ELECTRICITY DISTRIBUTION. Public Affairs Research Institute. https://pari.org.za/wp-content/uploads/2026/07/PoweringDevelopmentSPREADS08-07.pdf

Chicago

Ledger, Tracy, and Clyde Mallinson. POWERING DEVELOPMENT A PATHWAY TO INTEGRATING ROOFTOP SOLAR PV INTO MUNICIPAL ELECTRICITY DISTRIBUTION. Public Affairs Research Institute, 2026. https://pari.org.za/wp-content/uploads/2026/07/PoweringDevelopmentSPREADS08-07.pdf.

Wikipedia

{{cite report |last1=Ledger |first1=Tracy |last2=Mallinson |first2=Clyde |title=POWERING DEVELOPMENT A PATHWAY TO INTEGRATING ROOFTOP SOLAR PV INTO MUNICIPAL ELECTRICITY DISTRIBUTION |publisher=Public Affairs Research Institute |date=July 2026 |url=https://pari.org.za/wp-content/uploads/2026/07/PoweringDevelopmentSPREADS08-07.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ledger2026powering, author = {Ledger, Tracy and Mallinson, Clyde}, title = {{POWERING DEVELOPMENT A PATHWAY TO INTEGRATING ROOFTOP SOLAR PV INTO MUNICIPAL ELECTRICITY DISTRIBUTION}}, institution = {Public Affairs Research Institute}, year = {2026}, month = jul, url = {https://pari.org.za/wp-content/uploads/2026/07/PoweringDevelopmentSPREADS08-07.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }