Topic

Why monthly banking can be a gamechanger

The concept is simple: with onsite generation (such as embedded solar), once energy has been produced, it must be consumed immediately unless you have batteries to store excess energy for later use. However, batteries can be expensive, so most businesses don't consider them a viable option at this time.

If the energy isn't consumed, it becomes a wasted cost for your business. However, with renewable energy wheeling, this dynamic has changed. Now, there is more flexibility in when renewable energy is generated and when it's consumed.

The flexibility of wheeling renewable energy

With wheeling renewable energy, Eskom credits your bill according to the number of kilowatt-hours (kWh) you have wheeled through the grid. When calculating credits, Eskom looks at when the renewable energy is generated and when your business consumes that power. Eskom charges at three different periods of electricity consumption: peak, standard and off-peak.

  • Peak hours are mornings and evenings when the demand is at its highest.
  • Standard hours are during the day, and
  • Off-peak hours apply at night and on weekends.

Each period has different pricing. Peak hours are the most expensive, standard is second, and off-peak is the cheapest. Eskom's policy for wheeling renewable energy through the grid is that if you want to receive a credit for the energy you wheel, then the energy must be generated and consumed within the same time-of-use period.

For example, if your business consumes a peak kWh, the renewable energy used to offset that consumption must also have been generated during peak time. Initially, this might seem similar to onsite generation, where you must consume the energy you have generated in the same period. But there's more to it.

The power of monthly banking

Here's where monthly banking changes the game.

Eskom's system allows you to offset a peak kWh with a renewable energy kWh, provided it was also generated during peak hours. But here's the bonus: Renewable energy doesn't have to be generated on the same day or even during the same hour as when your business consumes power - it just has to be generated during peak time within the same month.

For example, say your business consumes a peak kWh on 5 March. If you're wheeling renewable energy from a solar farm, Eskom will allow you to offset that peak kWh you consumed on 5 March with a renewable energy kWh, provided it is generated during peak time at any point in March.

This flexibility means that if you generate more renewable energy than you need early in the month, then you can bank that energy for use later in the month. If your business consumption spikes towards the end of January, you can use the energy generated at the beginning of the month to offset it. This is called monthly banking.

The benefits of monthly banking

Monthly banking gives businesses flexibility and protection from the volatility of renewable energy generation. By offsetting excess renewable energy generation, monthly banking allows businesses to smooth out the volatility between renewable energy generation and business consumption, avoiding wasted costs.

Our research shows that businesses can achieve between 8% and 39% renewable energy coverage with embedded solar. However, with wheeled solar energy and the benefit of monthly banking, coverage can increase to between 41% and 64%.

This is a significant improvement, as onsite generation requires immediate consumption of the energy produced. Without monthly banking, excess energy is wasted, and the cost is lost. Wheeled renewable energy, however, allows businesses to balance generation and consumption more efficiently over a longer time frame, reducing wastage and enhancing cost savings.

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