South African companies innovate to tackle solar power inequality

A dozen community members stand alongside the road holding their solar panels in KwaDukuza, KwaZulu-Natal, South Africa, January 2021. Balwin Foundation/Handout via Thomson Reuters Foundation

A dozen community members stand alongside the road holding their solar panels in KwaDukuza, KwaZulu-Natal, South Africa, January 2021. Balwin Foundation/Handout via Thomson Reuters Foundation

What’s the context?

Corporates are funding solar panels for charities and the poor to help them cope with severe daily power cuts

  • Ailing electricity grid causes hours of daily power cuts
  • Private firms help poor citizens, charities access solar
  • Power to be sold back to government, supporting subsidies

CAPE TOWN - Studying in South Africa is a race against time for Reginald van Wyk, as he tries to finish his online course-work before the country's scheduled daily power cuts make learning impossible.

A member of the Cape Town Society for the Blind (CTSB), the 43-year-old is studying computer skills through the charity, which offers support and training to about 120 blind and visually impaired people.

"We don't need light because we can't see, but we need power to listen to our audio course-work on the computer," van Wyk said at CTSB's computer lab. "Our studies have been impacted."

Blackouts intended to take pressure off the ailing power grid run by struggling state utility Eskom have worsened again since early 2022 - leaving South Africans without electricity for up to 10 hours each day, and hindering charities like CTSB.

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As part of national efforts to tackle the energy crisis, the government in March created a new post - minister of electricity - and handed it to Kgosientsho Ramokgopa.

Ramokgopa's plans include extending the life of Eskom's coal-fired power stations and maintaining large outlays on diesel for Eskom's emergency open-cycle gas turbines.

The minister has also vowed to auction more than 15,000 megawatts (MW) of renewable energy project tenders - capacity that is equal to powering roughly 9.75 million homes, according to Eskom estimates that 1 MW can supply about 650 homes.

In the meantime, individuals, organisations and private companies who can afford to do so are rushing to buy solar power systems to keep their homes and businesses running.

South Africa is one of the world's most unequal nations, according to the World Bank, and the cost of solar installations puts constant power out of reach for many citizens and small firms, causing lost earnings, business closures and job losses.

For households earning less than 800 rand ($44) per month, access to solar power grew to 3% in 2021 from 0.3% in 2015, according to the Gauteng City-Region Observatory (GCRO), a university-based research partnership.

In the highest income group, covering those earning more than 51,200 rand ($2,800) monthly, solar access rose to 12% from 4% over the same period, the research found.

Some companies are financing innovations to support citizens or charities who would otherwise be left in the dark - be it through portable or pay-as-you-go solar systems.

CTSB, for example, will get solar panels and battery storage in the coming weeks through support from online solar marketplace Sun Exchange and cash from reinsurance company Hannover Re.

Hleziphi Siyothula-Mtshizana, the founder of In Pursuit Renewable Energy, an energy services company, said companies are "moving away from just donating food parcels to communities".

"Corporates are playing a significant role in transitioning the (energy) industry to be more inclusive," she told a solar power conference in Johannesburg last month.

Online solar marketplace

Aware of the high costs of solar for a charity, CTSB head Judith Coetzee approached Sun Exchange after seeing the company help schools, housing estates and farms get panels.

Sun Exchange enables individual buyers to purchase solar cells with cash or bitcoin for crowdfunded projects in emerging economies and then lease them to schools, businesses and other organisations which pay the investors for the power.

The company recently began partnering with businesses to encourage them to use their social investment budgets to sponsor or invest in "measurable renewable energy projects", according to Mike Pearce, Sun Exchange's corporate partner manager.

The solar panel distributed by Light Up A Home (LUAH) and Balwin Foundation to homes in Shakashead informal settlements, KwaDukuza, South Africa, February 2022. Balwin Foundation/Handout via Thomson Reuters Foundation

The solar panel distributed by Light Up A Home (LUAH) and Balwin Foundation to homes in Shakashead informal settlements, KwaDukuza, South Africa, February 2022. Balwin Foundation/Handout via Thomson Reuters Foundation

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The partnership involving CTSB and Hannover Re is its third such arrangement to date, with more in the pipeline, he added.

For CTSB, the support could not have come sooner, as power cuts have hampered production and delivery of its woven products like baskets and chairs - costing it about 1 million rand ($54,650) in sales each year, it said.

Through Hannover Re's donation of 1 million rand and sales made on Sun Exchange's site, CTSB will get 53 kilowatts worth of solar panels and 80 kilowatt-hours of battery storage, which Pearce said would keep it "up and running" during a power cut.

"That is really the game changer," he added.

Excess energy generated by the solar system will be sold back to the grid, bringing in extra income for CTSB.

The installation is expected to help CTSB avoid 1,575 tonnes of carbon dioxide emissions and save 2.2 million rand in costs over the project's 20-year lifetime, Sun Exchange said.

Once the solar system is set up, CTSB will lease it from Sun Exchange for 20 years, after which time the charity can either take over running it, remove it or extend the existing contract.

Mini panels and easy financing

Sun Exchange is not alone in its drive to make clean energy more widely accessible and affordable for South Africans.

Property company Balwin has teamed up with local charity Light Up A Home since 2020 to fund and distribute portable solar panels to more than 80 households in informal settlements located near its housing developments.

"We have people who work in the apartments we build. How can they help clean and build these apartments and then go back home to darkness?" said Cindy Mkhize, a regional manager at the Balwin Foundation which does outreach work for the property firm.

Other innovations focus on accessible financing, with some banks beginning to offer small-scale solar financing products.

WiSolar, a solar distribution company, has launched a rent-to-own as well as a pay-as-you-go solar service for residents of affordable housing developments. It is rolling out solar infrastructure in such an estate in Cape Town for 2,400 homes.

"We don't believe solar should be something exclusive to the wealthy as it is right now," said its founder Tonye Irims.

"We think everybody should have a shot at enjoying and accessing solar electricity," he said in a phone interview.

Privatisation risks

President Cyril Ramaphosa last month announced plans to fast-track new wind, solar, battery storage and gas projects to close an urgent 6,000 MW deficit, and create jobs in solar.

Companies are racing to fill the gaps - but privatising electricity production and storage comes with its own risks, energy researchers warn.

It could increase the costs of doing business, which would be passed onto the consumer, said Kalnisha Singh, founder of KD Strategies, a social impact advisory firm.

And municipalities may become unable to subsidise services to the poor as they lose revenue from wealthy consumers who go off grid, the Gauteng City-Region Observatory said in a report.

But in Cape Town, allowing charities to sell power back to the grid could help maintain subsidies by lowering the cost of electricity for municipalities, said Pearce of Sun Exchange.

"Energy stability is arguably the single biggest crisis right now within South Africa," he said.

"Rolling out large-scale renewable energy will take quite a few years, so until then corporates really need to focus on unlocking all the smaller-scale projects for the benefit of society," he added.

($1 = 18.2991 rand)

(Reporting by Kim Harrisberg; Editing by Kieran Guilbert and Megan Rowling.)


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