Energy

If creative business models are established, the solar energy industry can expand

Southern Africa has sun exposure, accessible land area, and decreasing component prices, meaning the area is well placed to resolve the region’s energy challenges through solar in a sustainable manner. But because of this ability, the region’s solar industry remains largely unexploited. This is particularly the case in residential market, that is frequently ignored based on the perception that solar is too costly, less consumer-attractive, and low-yielding. These problems can be solved by creative business strategies that accelerate adoption to expand the local solar energy industry. 

There are 17.1 million homes in South Africa, and 84.7 percent of those derive their energy supply from Eskom. Furthermore, 1,5 million homes are not connected to the power grid at all. Many of those linked to the grid are considering engaging in another energy supply to be able to supplement what Eskom provides, for example, at load shedding or even load reduction periods. The potential exists to be able to serve residential business that can be divided into the rural off-grid, hybrid and off-grid submarkets. In all these submarkets, there are unique desires and sensibilities.

Electricity from this sub-market is used to fuel appliances which does include pool heaters, entertainment systems, iron, air conditioning devices, stoves, geysers and microwaves depending on the building’s scale. For this submarket, reducing or eliminating the monthly electricity bill and maintaining leverage over availability at all times are the key factors for contemplating a solar system installation. For many individuals who are currently working from home because of the Covid-19 lockout and social distance protocols, a break-in as laptops and internet connections go down power supply implies reduced performance. 

A packaged solution can best represent this end-user demand. Next, manufacturers should consider the household’s high-energy-consuming equipment. An integrated solution aimed at reducing grid energy for such appliances should be built. To have an optimized end-to-end approach, solar systems can be paired with the complementary products including gas products. This bundling strategy will dramatically lower the electricity bill of consumers but comes with the drawback of a high cost of resources and swapping. Partnerships with the financial service providers, who will offer to fund which can easily be tied to the mortgage loan for the household where the device will be built are one way to address this obstacle. It is possible to optimize upfront expenses and distribute more manageable monthly installments over a longer period.

Apartments, townhouses and/or small homes with limited number of appliances than urban off-grid segment constitute this submarket. These consumers aim to reduce their spending on utility-based power and ensure that there is energy supply reliability during the load shedding. Consumers are not willing to make the full commitment needed to go off-grid and continue to use solar power as a means of back-up electricity.

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