A tenement block in Lwandle township in the Strand is fitted with solar panels to provide hot water. File
The current power supply crisis offers significant business opportunities for suppliers of solar and battery-based systems to the lower-income township markets across South Africa.
This is according to the chief executive of solar energy company Granville Energy, Tabi Tabi, who has worked on several high-tech and aviation start-up ventures over the years.
Tabi said these markets – both urban and rural – had been poorly served historically, and given the negative outlook for Eskom in the longer term, the time had arrived to offer these markets innovative and cost-effective electricity solutions.
“The potential impact is clear. Price-friendly solutions on a large scale will significantly improve the ability of small businesses to function optimally, adding much needed economic activity and promoting employment. At the same time, at the domestic level, families will enjoy uninterrupted energy supply and a reduced risk of crime. Social cohesion and general wellbeing will improve,” he said.
Tabi, who has served as a consultant to government, large enterprises, telecoms and IT service providers on technology architecture, new venture creation, product development and strategy, said the numbers were significant.
He quoted a 2019 study that showed about 22 million people in South Africa lived in townships, excluding the millions of people living in rural areas.
In Gauteng alone, out of a total of about 5.5 million private dwellings, around 2.7 million were in townships.
Granville Energy said this meant the township potential countrywide, both urban and rural, way exceeded the market where people had the means to pay more than R50 000 for an entry-level battery and solar solution.
“The obvious practical problem is cost. While many households in more affluent areas are able to purchase solar/battery systems starting at R50 000 and upwards, such amounts are beyond the means of most township residents and businesses,” it said.
The solar energy company said traditional funding institutions, such as banks, the Industrial Development Corporation and World Bank, had repeatedly avoided this vital sector of the market in preference for larger commercial and industrial projects.
According to the firm, as a provider of renewable energy solutions with a focus on Africa, they have been approached by many township residents asking for more modest solutions. It added that some have formed neighbourhood collectives or stokvels. They said that having pooled their resources, they had come to the company to address their needs.
Tabi said that with some imagination, institutional funders as well as the government could catalyse a broad-based take up of renewable energy by township residents. He said the advantage of collectives or stokvels was that everyone had a stake in ensuring continuity of energy supply.
“Given the impact that a huge number of solar/battery installations will have on communities and the economy, we are confident that funding models acceptable to a large proportion of township dwellers can be found,” Tabi said.
He added that partnerships with community structures and groupings would enable suppliers to understand the market better and develop various options, including the sharing of systems, that would work for everyone.
BUSINESS REPORT