The economic challenges in South Africa are daunting for most businesses. When coupled with the impact of load-shedding, there are compelling reasons why many small and medium enterprises (SMEs) are actively seeking out alternatives to the current reliance on a power grid that is not stable.
Right now, a wait-and-see approach is less appealing as many businesses seek to avoid the losses incurred during power outages, coupled with tariff hikes and the additional measures designed to work around these issues. The urgency to act is there and each stage of load-shedding costs the country hundreds of millions of rand, according to the Council for Scientific and Industrial Research. With that in mind, should SMEs make the switch to sustainable options such as solar?
There is no doubt that South Africa, with its burgeoning population, represents one of the most attractive off-grid opportunities in the world for mini-grids and solar technologies. The country also benefits from some of the most sustained sunlight in the world, and many have pointed to renewables as the answer to the country’s electricity woes.
‘South Africa will undoubtedly benefit from a move towards greener technologies and so will the planet. It is, however, a business strategy that must be carefully considered, as the costs and implementation of going off the grid are not a one-size-fits-all approach. Clients are encouraged to assess the options with the same diligence as any other business investment’, said Alan Shannon, Executive for Small Business Services at Nedbank.
Going off the grid will undeniably reduce your monthly bill and attract a growing number of environmentally conscious consumers, but the initial investment must be considered.
Currently, the costs do not deter many businesses from their initial enthusiasm. Factors such as storage or space required for the technology as well as possible downtime for installation must also be considered. Will those incredible solar-powered solutions affect your business insurance cover and costs? This must be explored as well. The result of sustainable solutions must include business sustainability. For large-scale manufacturing plants, there are already a host of success cases, but the same cannot be said for the SME sector.
With the costs of going off-grid still likely to be more than most SMEs can afford, scalable, quality solar PV hybrid solutions still represent great value.
They take care of a business’ immediate backup power needs during load-shedding and power failures, while opening the door to scaling up in future to solar panels and additional batteries.
From a hybrid solution that is more budget-friendly, the switch to self-generating power, as costs go down, is largely a better approach for most SMEs already battling other market-related challenges.
‘A forward-thinking strategy that addresses both the current need and a future aim places a business in a stronger position to provide backup power and build a platform for saving a fortune in electricity costs in the future. It may not be time to go off-grid just yet, but there is every reason to start laying the foundation to reap the benefits,’ concludes Shannon.
By Alan Shannon, Executive for Small Business Service, Nedbank South Africa.