Anyone reading the news can see that the price of electricity continues to rise. Headlines scream about corruption, labour disputes and the increased cost of getting coal to the power stations across the country. There is speculation that several of the power stations have only 20 days coal reserve with no way of getting more coal, other than by transporting it by road from the Medupe coal mine. This is prohibitively expensive as well as logistically challenging – damage to the road alone is a major concern.
With the wet season about to hit the northern parts of South Africa, serious concerns have again been raised about the risk of load shedding with some comparing it to the challenges of 2009 that saw most of the country affected on a regular basis.
For commercial and retail operations, losing money because stores are closed is not an option. Many landlords have installed generators but these are expensive to run. The cost of electricity is also increasing the cost of rent, forcing smaller shops out of business. A number of landlords of big shopping centres are now seeking an alternative solution. Fedgroup has partnered with Emergent for the past two years to finance urban solar farms.
These urban solar farms are typically around 2,000 panels that together can generate enough power to cover 70% of a shopping centre’s needs. More electricity could, of course, be generated but two logistical issues are faced: storing the excess electricity to be used overnight for alarms and lights requires batteries that are currently extremely expensive. Secondly, electricity cannot be sold back into the grid easily or profitably except in the Nelson Mandela bay municipality. Emergent have based their business model on providing 70% of a centres needs but at a price that is at least 10% lower than the national grid. This gives landlords a cheaper and more reliable source of power.
As an impact farmer, you can buy one or several of the panels on these farms. You receive a share of the profit from the sale of the electricity to the landlord. The actual collection, management and maintenance of the panels is managed by Emergent. You pay for the upfront purchase of the panel and its installation and insurance. All panels are so-called ‘Tier One’ and will last at least 20 years. At the end of the term, Fedgroup offers a guaranteed buy-back of the panel of R1,000 or you can collect your panel. Each panel has a barcode, registered to the investor.
So if you have R5,000 to invest, why not let it earn 10% per annum in a solar panel, with regular monthly payments? Fedgroup charges a low platform fee that is the equivalent of 1% of the purchase price, split over each month. The platform fee is set in rand terms the day you buy your panel (so currently R50) and it escalates with inflation.
All our financial modelling has been undertaken looking at weather patterns for the past twenty years and our pilot has been operational now for the past two years. Already thousands of panels have been sold with investors earning income monthly. So why not get involved and find out more? ifcontact@fedgroup.co.za
