Affordable Electricity Through Bulk Supply Reduction
Development of a BESS-Centered Distributed Peak Tariff Arbitrage Model based on actual consumption data from Graaff-Reinet covering 53 Million kWh annual consumption.
Key Financial Metrics
Unit Cost
R65,000
Annual Savings (Year 1)
R7,198
Internal Rate of Return
13.71%
Payback Period
8.1 Years
MOIC (20 Years)
3.88x
20-Year Total Return
R252,329
The tariff arbitrage model capitalizes on the significant differential between peak and off-peak electricity tariffs in South Africa's Time-of-Use (TOU) pricing structure. By charging batteries during low-cost off-peak periods and discharging during expensive peak periods, the system generates consistent, predictable cash flows over a 20-year contract term.
How It Works
- Charge batteries during off-peak (R1.079/kWh)
- Discharge during peak periods (R2.69–R6.47/kWh)
- Net benefit from tariff differential
- 80/20 revenue split (Investor/Municipality)
Daily Savings Breakdown
The significant differential between off-peak and peak tariffs creates the arbitrage opportunity.
Inverter Power
5kW
Battery Capacity
10kWh
Usable Capacity (90% DoD)
9kWh
Round-Trip Efficiency
90%
Battery Type
LiFePO₄
Cycle Life
6,000 cycles
Proven Technology
LiFePO₄ chemistry with 10-year warranty and 6,000 cycle life
Scalable Solution
Consistent unit economics from pilot to 1,000+ household deployment
Win-Win Partnership
Municipalities benefit with zero capital outlay