Local solar player Grid Africa has raised R50m in new investment capital that it hopes to deploy in renewable energy projects in SA and its expansion in neighbouring countries.
On Tuesday, Grid Africa said it had secured a R50m equity investment ($2.83m) from Rifuwo Energy Partners. This funding would be used to advance the company’s renewable energy projects across SA, it said.
The company sees an opportunity to capitalise on potential energy price increases in SA that may lead some consumers to switch over to renewable sources of power.
It said the recent application by Eskom for a staggering 36% increase in tariffs to the National Energy Regulator of SA (Nersa) signalled a substantial hike in overall energy costs, which is expected to affect business customers in particular. “In light of this development, Grid Africa is committed to developing solar energy solutions aimed at mitigating these rising costs.”
In recent years, solar companies have done well as a result of the unreliable power delivery by Eskom and its rolling blackouts in 2022, 2023 and the start of 2024. With power now more secure, solar players such as Grid Power have relied more on helping consumers and businesses to track and manage power consumption.
Plentify, another local energy company, has developed a device called HotBot, which can be attached to solar or geyser systems, helping to monitor energy consumption and use. The company has partnered with other energy players, including Herholdt’s and Wetility Energy, to distribute the product.
The potential electricity tariff hike looks to be another point of opportunity for the sector.
Grid Africa recently expanded its operations into Zambia, a market that is facing significant challenges with load-shedding.
“The recent changes in energy security in SA present a unique opportunity for businesses to deploy more solar energy projects, providing a buffer against escalating energy prices,” said Norman Moyo, CEO of Grid Africa. “With decreasing costs in solar technology and lithium batteries, we can further enhance energy efficiencies and enable peak shaving for our clients, where they can avoid peak charges on the electrical grid.”
Rein Snoeck Henkemans, CEO of competing operator Alumo Energy, said Eskom’s revenue application underscored growing demand for renewable energy solutions in a competitive, open market.
“As South Africans contemplate the outrageous possibility of electricity tariff hikes totalling up to 36.15% from the beginning of April next year, it’s becoming increasingly clear that the future of affordable, reliable energy is shifting towards self-reliance.”
He pointed out that in 2014, an Eskom direct home power customer using an average of 800 kilowatt-hours (kWh) of electricity each month would have spent a total of R1,055.40. Today, they would be spending R2,948.98 — a rise of about 180%.
By comparison, inflation over the same decade totalled 67.8% “pointing to the huge disparity between the pace of electricity price increases and other prices”.
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