Net Metering and Feed-In Tariffs in South Africa

Net metering versus feed-in tariffs

These terms get used interchangeably, but they describe slightly different mechanisms, and understanding the difference helps you read your municipality's offer correctly.

Net metering in its purest form measures your energy flows both ways and nets them off — every unit you export offsets a unit you import, often at the same value. True one-for-one net metering is rare in South Africa. What most municipalities actually run is closer to net billing, where imports and exports are metered and priced separately, usually with exports credited at a lower rate than the retail price you pay for electricity.

A feed-in tariff is a specific rate paid per kilowatt-hour you export. In the SA context this is typically applied as a credit on your municipal account rather than a cash payment, and many municipalities cap how much credit you can accumulate or carry over.

Why exports are usually credited, not paid in cash

Municipalities buy bulk electricity and add a margin to cover their networks and services. Paying you the full retail rate for exports, or handing over cash, would undercut that model. So the common structure is: you get credited for exports at a wholesale-like rate, that credit reduces your bill, and only in some cases can a surplus be paid out or carried forward. It is genuinely useful — but it is not a salary.

What you can realistically expect to earn

Here is where honesty matters more than hype. The value of exported solar in South Africa is real but modest, and it varies by municipality and tariff category. A few principles hold almost everywhere:

• You earn less per unit exported than you pay per unit consumed. This is the norm, not a rip-off — it reflects how utilities are structured.
• Self-consumption beats export, every time. A kilowatt-hour you use yourself saves you the full retail price. The same kilowatt-hour exported earns you the lower feed-in rate. So using your own solar is always worth more than selling it.
• Fixed charges may apply. Some municipalities levy a fixed monthly charge on registered generators, which you need to factor in.

The takeaway: treat feed-in credits as a welcome bonus that trims your bill further, not as the reason to go solar. The core financial case is built on slashing what you buy from the grid and keeping the lights on during outages.

Which municipalities pay for exports?

The landscape shifts as more municipalities roll out or refine their programmes, so always confirm the current position with your own municipality. That said, the broad picture is:

• Metros lead the way. Larger metros such as the City of Cape Town have been prominent in developing residential feed-in and cash-incentive schemes, and others including Johannesburg, Tshwane, eThekwini and Nelson Mandela Bay have SSEG and export frameworks in various stages of maturity.
• Eskom-supplied areas have their own arrangements for small-scale generation, separate from municipal schemes.
• Smaller municipalities vary widely — some have adopted export tariffs, others are still developing capacity to bill them.

The non-negotiable prerequisites

Whatever your municipality offers, you cannot earn a cent for exports until two things are true:

1. You are a registered SSEG — your system is formally registered as a Small-Scale Embedded Generator.
2. You have an approved bidirectional meter — a meter that separately records what you import and what you export. A standard meter cannot measure export, and some older prepaid meters penalise export by counting it as consumption.

Skipping registration does not just cost you credits — an unregistered grid-tied system is a compliance breach with real risks. Getting registered is the gateway to everything else.

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Setting your system up to benefit

If earning from exports appeals to you, the way your system is designed and installed matters.

Size for self-consumption first

Because self-consumption is worth more than export, the smartest strategy is to size your system to cover your own daytime and evening needs — using batteries to shift solar into the evening peak — and then export whatever genuinely surplus energy remains. Oversizing purely to export at a low feed-in rate rarely pays off.

For a typical household, a well-matched mid-tier system covers daily needs, provides meaningful backup, and produces a modest surplus on sunny days that can earn credits where the municipality allows it.

Households with higher consumption — larger homes, pool pumps, home offices, more air conditioning — may benefit from a larger array and battery, which both improves self-sufficiency and increases the surplus available to export.

Use an approved, grid-compliant inverter

Feed-in only works with an inverter that safely synchronises with and disconnects from the grid, and that appears on your municipality's approved list. This is standard for the equipment used by established installers, and it is the same requirement that underpins your SSEG registration.

Let the installer handle registration and metering

Getting registered as an SSEG and arranging the bidirectional meter is exactly the kind of admin a good installer manages for you. Alumo — the installer SolarGuide refers customers to — supplies, installs and warrants systems built on municipality-approved inverters and handles the compliance paperwork, so you are set up correctly to benefit from feed-in credits where your municipality offers them.

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Frequently asked questions

Can I actually make money selling solar back to the grid in South Africa?

You can earn credit, and in some municipalities cash, for surplus energy you export — but it is usually modest and credited at a lower rate than you pay to buy electricity. Think of it as a bonus that further reduces your bill rather than a primary income. The bigger savings come from using your own solar instead of buying from the grid.

Do all municipalities pay feed-in tariffs?

No. Availability varies significantly. Larger metros have been most active in developing feed-in and net-billing schemes, while some smaller municipalities are still building the capacity to bill exports. Always confirm the current arrangement with your own municipality before counting on export income.

What equipment do I need to earn feed-in credits?

You need a registered SSEG system with a grid-compliant, municipality-approved inverter, and an approved bidirectional meter that separately records import and export. A standard or older prepaid meter cannot measure export correctly, so a meter change is often part of the process.

Is it better to use my solar or export it?

Use it. A unit of solar you consume yourself saves you the full retail electricity price, while the same unit exported earns only the lower feed-in rate. The best strategy is to size your system for self-consumption — including batteries to cover the evening — and export only the genuine surplus.

Does SolarGuide set up net metering for me?

No. SolarGuide is an independent referral partner that helps you compare options and get a free quote. Alumo supplies, installs, finances and warrants the systems and handles SSEG registration and metering. Pricing is indicative and subject to a site assessment and credit approval.