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Garden Route to Get R1.2-billion Solar Farm to Counter Load-shedding

A R1.2-billion solar farm project has been approved by the National Treasury, Kannaland municipal manager Reynold Stevens has confirmed.

Stevens announced the project during an oversight visit to the Garden Route district municipality recently, adding that it would be a public-private partnership between Kannaland Municipality and InnovSure to provide an alternative source of green energy to the municipality.

”This is a fantastic initiative as this investment will create job opportunities and the company will further invest R42 million per annum in the Kannaland Municipality for critical infrastructure projects and further assist the Municipality with smart technology,” said DA MPP Deidre Baartman.

“Government cannot tackle the country’s energy crisis on its own,” Baartman said.

“It is vital that we break down the national government’s monopoly on energy generation and provision, and bring in the private sector to diversify this industry as a matter of urgency.”

“The Kannaland solar farm is a prime example of this.”

Combating load-shedding

During off-peak periods, the solar farm will also be able to draw energy from Eskom and store it for release later.

This power can be used to supplement shortages during peak hours and sent to nearby municipalities such as Mossel Bay.

“I will be monitoring this development closely to ensure that the Western Cape attains energy independence from Eskom to grow our provincial economy and create much needed jobs,” Baartman said.

The DA said it remains committed to cutting red tape and using innovation to grow its provincial economy and create jobs.

A map of the Kannaland municipality is shown below.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], American Public Power Association [2].

JUA Technologies and BrazAgro to Distribute Solar-drying Tray in East Africa

JUA Technologies International, a Purdue University-affiliated startup developing solar-powered crop-drying devices, is partnering with BrazAgro Ltd., a supplier of Brazilian farm machinery, to distribute its solar-drying tray.

Dehytray is a solar-drying solution for small and mid-size growers and food processors and home gardeners. Its convenient size and ease of use are backed by years of research into drying technology. It is durable, approved for food use, and designed for optimum drying of foods using natural solar energy. It is designed for drying grains, fruit, vegetables, fish, meat and more.

The company was co-founded by the husband-wife team of Klein Ileleji, a professor in agricultural and biological engineering at Purdue, and Reiko Habuto Ileleji, a Purdue alumna who earned her PhD from Purdue’s College of Education.

When they visited Nairobi during the summer to demonstrate the Dehytray at the 6th Agritec Exhibition and Congress, they received immense interest in the product from local farmers and processors, who quickly realized its benefits to the profitability of their operations.

Securing distributors across wide-ranging regions, four continents and counting, is a challenging endeavor. The company implemented this partnership with BrazAgro, which will distribute the trays in Burundi, Ethiopia, Kenya, Rwanda, Tanzania and Uganda.

Throughout East Africa, the Dehytray will be used to dry specialty crops like leafy green vegetables, okra, mango, bananas, guava, tubers such as cassava and sweet potato, coffee, and grains, among other food products. The Dehytray meets a high hygienic standard for sun drying of crops, is quite portable, and can be adapted into a wide range of processing operations for the farm or small to mid-size processor.

The Dehytray was developed at Purdue’s agricultural and biological engineering program. The research was funded partly by USAID and USDA. Field tests on drying specialty (horticultural) crops and grains using the Dehytray have been carried out in the U.S., Nigeria, Ghana, Senegal, Kenya, South Africa and Peru. The Dehytray has been shipped to customers on four continents since it became available on the market in December 2018.

Some of the technology used by JUA Technologies International is licensed through the Purdue Research Foundation Office of Technology Commercialization. JUA Technologies also received entrepreneurial support from the Purdue Foundry.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], American Public Power Association [2].

South African Solar Energy Tax Incentives You May Not Be Aware Of

A little-known amendment to the Income Tax Act allows for depreciation in the year of commissioning of the full cost of a grid-tied solar PV system of less than 1 MW used for electricity generation by a business in the course of its operations.

South Africa’s government, energy regulator and Eskom have often been criticised for obstructing the introduction of distributed, small-scale embedded generation (SSEG) which would help businesses to cut costs and ensure the stability of their power supply during load shedding.

But in fact, there are significant and far-sighted tax breaks which have been put in place by National Treasury to encourage and incentivise business owners to install their own generation in the form of grid-tied, rooftop or ground-mounted solar PV systems on buildings, parking lots, warehouses, factories and farms.

Accelerated depreciation allowances

From 1 January 2016, a little-known amendment to Section 12B of the Income Tax Act (Act 58 of 1996) allows for depreciation in the year of commissioning of the full (100%) cost of a grid-tied solar PV system of less than 1 MW used for electricity generation by a business in the course of its operations.

The capital depreciation allowances for solar PV systems greater than 1 MW remained unchanged in the January 2016 amendment to the legislation, which continues to allow full depreciation over three years. This permits depreciation of 50% of the capital cost in the year of commissioning, 30% in the subsequent year, and 20% in the third year.

The accelerated depreciation allowance for solar PV systems applies whether they are installed for the business by contractors or developers, or paid for by the business in a credit sale agreement (as defined in Section 1 of the Value-Added Tax Act) — either upfront in a single payment or in multiple payments over an extended period.

The cost of the solar PV system allowed for accelerated depreciation includes its full direct capital cost, including design and engineering, project planning, delivery, foundations and supporting structures, solar PV panels, AC inverters, DC combiner boxes, racking, cables and wiring, and installation. Finance costs are excluded.

This allowance was confirmed in a binding private ruling by SARS dated 11 October 2018 (BPR 311) in respect of an application by a private company in South Africa to clarify the deductibility of the capital expenditure incurred to install solar PV systems at a number of sites owned and leased by the applicant. The systems were being installed to reduce the company’s electricity costs.

The improved business case

Whether paid for upfront after commissioning, or in multiple payments over an extended period, the benefits of this tax incentive to business owners, particularly for solar PV systems of less than 1 MW, are significant.

Where the company tax rate is 28% and payment is upfront, a 100% tax-deductible depreciation allowance in the year of installation and commissioning will result in a 28% nett discount on the purchase price of the system at the end of the tax year.

This significantly affects and reduces the payback period of a solar PV project of less than 1 MW.

Better still, when paying for the same solar PV system on a credit sale agreement through multiple payments over an extended period, the transaction can be cash-flow positive for the business over the lifetime of the solar PV plant in all but the first months to the end of the tax year during which commissioning takes place.

With these significant tax incentives and the rapidly rising price of grid electricity, the business case for installation of grid-tied, rooftop and ground-mounted solar PV is fast becoming a no-brainer.

Awareness of the incentives

What is most surprising, however, is how few business-owners and companies are aware of these tax breaks, which can make such a positive impact on their cash flow and bottom line.

This lack of awareness is perhaps a result of the difficulties faced in accessing relevant information on the subject from SARS itself.

For example, efforts to simply download or view the up-to-date amended Section 12B of the Income Tax Act from the SARS website and the public internet proved fruitless. Similarly, no response or even acknowledgement of receipt was received to a query sent to the SARS media desk at sarsmedia@sars.gov.za.

Only after a time-consuming search and a paid subscription to a private tax information service provider was this possible.

In an article in Engineering News on 14 August 2019, entitled “Time to end silence on renewables misinformation — SAPVIA chair”, the new chairman of the South African Solar Photo-Voltaic Industry Association (SAPVIA), Wido Schnabel, said:

“The organisation will become more assertive in outlining the benefits of solar for South Africa and in correcting some of the prevailing misperceptions about the role of variable renewable energy in the country’s future electricity system.”

The tax incentives available to businesses for the installation of solar PV systems is certainly something that SAPVIA and other related industry associations should be “shouting from the rooftops” in the interests of their members, as well as those of developers, installers and suppliers of solar PV systems, components and services.

The challenge

Businesses which have installed solar PV in the 2018/19 tax year, or are about to do so, stand to benefit substantially. The Council for Scientific and Industrial Research (CSIR) estimates that there was close to 400 MW of installed solar PV in the country at the end of 2017 and that up to 200 MW was installed the following year. With a wider understanding of the business case, this could be much higher in future.

Most of these installations are less than 1 MW — which is all that most private businesses require across a wide range of sectors of the economy, including manufacturing and retail.

If only the various arms of government, business, labour and communities were on the same page and working with a common purpose to bring the benefits of SSEG to the productive economy and the environment, to address the current electricity and water supply constraints, and to facilitate economic growth and the creation of quality jobs.

This article was written by Chris Yelland (investigative editor at EE Publishers) and Mariam Isa (a freelance journalist).

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: Mariana Proença [1], [2].

Climate Financing in Africa Accelerates Alongside Urbanization

When daily power cuts became the “new normal” in Zambia during a 2015 drought, farms, companies, schools, and households experienced anything but business as usual. Zambia’s energy is drawn primarily from hydro power, so when a dry spell plagues the nation, its economy—alongside the potential for long-term socio-economic development—dries up, too.

Although low rainfall that year was especially punishing, Zambia’s energy crisis has been a problem for over a decade because of the nation’s reliance on hydropower. In theory, diversification was possible: since the Zambian sun shines almost 65 percent of daylight hours, solar power was an attractive option. But scalability and affordability had posed challenges.

Scaling Solar, a World Bank Group program that helps developing countries procure grid-tied, private solar power, offers Zambia a solution. The program includes technical advice for large-scale adoption of solar technology and a set of pre-negotiated, template documents aimed at increasing transparency and reducing risks and costs for governments and developers. Financing, guarantees, and insurance to boost confidence about projects in new and challenging markets are also options.

Scaling Solar made it possible for Zambia to achieve some of the lowest solar tariffs in the region. The program has since expanded to Senegal, and mandates have also been signed in Ethiopia and Madagascar. Spreading renewables-based solutions across the continent is important because although Africa is responsible for only 4 percent of global greenhouse emissions, 65 percent of Africans are in some way impacted directly by climate change.

Identifying solutions to help Africans adapt and become more resilient to climate change is one of the objectives of the One Planet Summit taking place on March 14 in Nairobi. The event highlights Africa’s situation as a continent facing climate-related challenges and opportunities, and it will convene African leaders, entrepreneurs, donors, international organizations, and other stakeholders. It is co-hosted by the World Bank Group.

Shining a Light on African Sustainability

The One Planet Summit is built around the idea that resources and solutions for renewable energy already exist in Africa—but there is a need to accelerate financing and mainstream development as the region struggles with rapid urbanization and other challenges presented by global warming.

The figures are daunting. More than 470 million people live in sub-Saharan Africa’s cities, and this is expected to double over the next 25 years. By 2050, the region is expected to house 20 percent of the world’s urban residents. Climate change is a leading factor contributing to the trend toward urbanization, as extreme temperatures and unpredictable rainfall affect income from agriculture.

As urbanization continues, so does the demand for resources and impact on the environment. Currently, cities consume over two-thirds of the world’s energy and account for more than 70 percent of global carbon emissions. The concentration of people, industry, and infrastructure leaves cities especially vulnerable to climate change–and also uniquely placed to combat it.

Nairobi, the city hosting the One Planet Summit, is a good example of how climate-related challenges can open the doors for climate-smart investment. Although 70 percent of Nairobi’s installed electricity capacity comes from renewable sources, there are opportunities to attract investment in other sectors. IFC analysis found that Nairobi has a $8.5 billion climate investment opportunity leading up to 2030. The biggest investment opportunity—$5 billion—lies in electric vehicles, followed by public transport ($1.6 billion), green buildings ($1.1 billion), water ($360 million), renewable energy ($240 million), and waste ($140 million).

Together, these investment opportunities result from strong policy frameworks such as Nairobi’s Integrated Urban Development Master Plan. The plan focuses on sustainable transport, water and wastewater, power, municipal solid waste, and telecommunications. As with Scaling Solar, these initiatives—along with others that will be proposed and examined at the One Planet Summit—approach long-term climate and development challenges with a determination that sustainability, not crisis, will become the “new normal.”

To find out more about the One Planet Summit, click here.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], Karsten Würth [2].

Relo Originals: Solar Sustainability

Now that we’ve entered springtime in South Africa, the weather is gradually getting warmer, and many of us are preparing for being back at the beach during summer at the end of the year. In a region like SA, we’re lucky enough to get lots of sunshine not only in summer, but year-round. This creates the perfect opportunity to be more sustainable, and make use of solar power. And that’s exactly what we’ve done at our head office in Cape Town.

Solar power

Solar power is the conversion of energy from sunlight into electricity, either directly using photovoltaics (PV), indirectly using concentrated solar power, or a combination. Concentrated solar power systems use lenses or mirrors and tracking systems to focus a large area of sunlight into a small beam. Photovoltaic cells convert light into an electric current using the photovoltaic effect.

Photovoltaics were initially solely used as a source of electricity for small and medium-sized applications, from the calculator powered by a single solar cell to remote homes powered by an off-grid rooftop PV system. Commercial concentrated solar power plants were first developed in the 1980s.

As the cost of solar electricity has fallen, the number of grid-connected solar PV systems has grown into the millions and utility-scale solar power stations with hundreds of megawatts are being built. Solar PV is rapidly becoming an inexpensive, low-carbon technology to harness renewable energy from the Sun.

The International Energy Agency projected in 2014 that under its “high renewables” scenario, by 2050, solar photovoltaics and concentrated solar power would contribute about 16 and 11 percent, respectively, of the worldwide electricity consumption, and solar would be the world’s largest source of electricity.

Our office

Our head office in Cape Town has, since early 2014, featured 25 photovoltaic panels on its roof, positioned to harness the most sunlight possible during daylight hours. These panels are connected to a smart charge controller, and the power is distributed throughout our building. Electricity usage can be monitored via a mobile app, which provides us with usage history, so that we can track our conservation efforts.

In addition to this, we also have battery units that keep the solar system running. In the event of a power outage, the batteries will keep our essential systems running. To date, we have converted 40.7 MWh of solar energy into usable electricity. All of this is made possible by a SolarEdge system. To read more about them, click here.

Aerial view of Relocation Africa’s head office in Cape Town, South Africa.

The importance of renewable energy

Renewable energy is energy that is collected from renewable resources, which are naturally replenished on a human timescale, such as sunlight, wind, rain, tides, waves, and geothermal heat. Renewable energy often provides energy in four important areas: electricity generation, air and water heating/cooling, transportation, and rural (off-grid) energy services.

Rapid deployment of renewable energy and energy efficiency is resulting in significant energy security, climate change mitigation, and economic benefits.

In 2011, the International Energy Agency said that “the development of affordable, inexhaustible and clean solar energy technologies will have huge longer-term benefits. It will increase countries’ energy security through reliance on an indigenous, inexhaustible and mostly import-independent resource, enhance sustainability, reduce pollution, lower the costs of mitigating climate change, and keep fossil fuel prices lower than otherwise. These advantages are global.

We encourage other businesses to implement sustainable solutions to their power systems, over time saving both money and the environment.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2], [3]. Image sources: Andreas Gücklhorn [1], [2].