Micasa Energy Solutions is an EPC (Engineering, Procurement and Construction) company that offers turn-key solutions: Consultation, engineering, compliance, balance of systems, Eskom applications, operations and maintenance, as well as support. We also offer financial solutions through our registered financial partners. (asset finance, bank loans, PPAs – Power Purchase Agreements).
We specialise in solar energy solutions for the C&I, agri and residential developments. As well as advanced water heating and monitoring of any energy plant built by us.
In this blog article we explore the option of maximising savings on the agriculture front with a case study of agricultural energy solutions on a farm in Sundra, Mpumalanga which is part of the Van Wyk Trust. In today’s economic landscape, finding ways to reduce expenses and improve cash flow is crucial for businesses of all sizes. For farmers, who often face high utility bills and unpredictable costs, finding sustainable energy solutions can be particularly challenging.
With the right approach and expertise of the Micasa Energy Solutions (MES) team, however, significant savings can be achieved thanks to agricultural energy solutions. Let us delve into a case study that showcases how one farm managed to slash its utility expenses and improve cash flow through strategic energy solutions.
Phase 1: Consolidating costs
Before reaching out to MICASA Energy Solutions, the farm in question faced several challenges. The farm had various transformers which meant 6 different utility bills – a situation that would be a giant headache in anyone’s business. The farm was on Landrate 1,2,3 and Ruralflex interval tariff schedules. Additionally, the farm relied on a 100 kVA generator to mitigate load shedding, resulting in increased fuel costs.
The farm’s monthly expenses to Eskom alone averaged R 42 368.10, excluding VAT. Which added up to a mind-blowing R 508 417.20 excluding VAT per year to Eskom alone. Mr. Van Wyk, contacted MICASA Energy Solutions to assist with finding a solution that would reduce utility costs as far as possible with the aim of achieving positive cashflow for the farm.
MICASA stepped in and began with streamlining operations by consolidating multiple tariffs into a single utility bill. While Micasa Energy Solutions in partnership with Spoormaker & Partners handled the consultation, installation, engineering, compliance, BOS, Eskom applications and operations and maintenance; Merchant West handled the asset finance side of the project.
MES installed a Goodwe 100 kW Grid-tie Inverter and 204 x 545 W HT Longi Tier 1 Panels which led to an extra saving of around R5 354.00 per month on average from the PV (self consumption only). This was an average of 3,433 kWh less that was billed by Eskom monthly.
By rebuilding the internal distribution network (MV-medium voltage) thereby removing five Eskom transformers installing a grid-tie inverter and solar panels, MES significantly reduced the farm’s reliance on traditional energy sources, leading to monthly savings of R25 354.00 or R304 248.00 per year (excluding VAT).
“It is extremely important to mention that a grid-tied system does not work when there is loadshedding (even during the day). This means the farm was still subject to loadshedding and high fuel costs. It is also not legal to export electricity to the grid without approval from Eskom. Most of the savings in this phase of the project comes from consolidating the electrical distribution and keeping only one Eskom transformer (therefore a single utility bill which means lower fixed costs).
“Due to waiting for Eskom’s approval (a tedious process) to legally export excess PV power back to the grid, the projected savings were negatively affected,” says Wim Aucamp – Managing Director of MICASA Energy Solutions.
“Phase 1 was successful as the primary goal of cash flow positivity, saving money and cutting out unnecessary expenses, even with financing of assets, was achieved,” added Wim.
Phase 2: Going off-grid
Building on the success of phase 1, Mr. Van Wyk contacted MES once again with a new goal in mind – going off-grid. MES proposed a hybrid solution, incorporating advanced inverters, batteries, and additional solar panels. With this setup, the farm aimed to achieve complete energy independence.
For phase 2 MES included the monthly fuel and generator expenses as part of the financial feasibility, which was not possible in phase 1. The farm had an average utility bill of R17 014.10 excl. VAT per month or R 204 169.20 excl. VAT per year after phase 1’s successful implementation. The farm was billed an average of 5 431 kWh per month or 65 172 kWh per year.
The farm also had an average monthly expense of R 35 000.00 excl. VAT per month on fuel for the generator due to loadshedding. This is an additional cost of R 420 000 excluding VAT per year. This means that the farm had a total average expense of R 52 014.00 per month or R 624 168.00 per year.
MES once again handled the consultation, installation, engineering (in partnership with Lombard Engineering), compliance, BOS, Eskom applications and operations and maintenance while Merchant West again handled the asset finance.
MES installed a hybrid solution that consists of 2 x ATESS 50 kW inverters, 2 x 128 kWh solar MD HV Li-Ion batteries and an additional 72 x 555 W HT Longi Tier 1 panels all components integrated onto a PLC via our system integrator.
Following the implementation of phase 2, the farm saw remarkable results. Its utility bill from Eskom was reduced to R0.00 – yes, that is right ZERO. Additionally, the reliance on the generator for backup power decreased significantly.
“Thus far the farm only has an average expense of R 3 333.00 per month on fuel for the generator in case it is needed. This allows him to pay towards the system which is financed through Merchant West at a lower cost – also keeping him cash flow positive,” explains Wim.
Maximising savings and tax benefits
In addition to the savings gained by the farm, they also reaped the benefits in terms of section 12.B of the tax gains implemented by the South African government. This drastically improved the cashflow value and lowered the initial ROI (return on investment).
The case study highlights the potential for farms to significantly reduce monthly expenses through agricultural energy solutions such as consolidation of utility bills and the implementation of solar power systems. Even with financing through asset financing companies like Merchant West, substantial savings can be realised.
While specific financial details are kept confidential, the success story of this farm serves as a beacon for other farmers seeking to optimise their operations and improve their bottom line. By embracing innovative energy solutions, farms can not only reduce costs but also contribute to a more sustainable future.
Contact MICASA Energy Solutions’ expert team today to find out how we can get your farm into a far more lucrative, positive cash flow situation. You can contact the MICASA sales team at (+27)87-231-7162 or sales@micasa.co.za. Visit their website at www.micasa.co.za.
