The green shoots sprouting out of the Eskom crisis
'Serious developments' are now afoot that will result in renewable energy becoming more widely adopted in coming years.
Subscribe to continue reading this article
and support trusted South African journalism
As Eskom continues to struggle to provide sustainable electricity for the country, some experts believe load shedding problems are driving a new wave of solutions which could result in our country becoming a global leader in clean energy solutions.
According to Jeff Miller, the chief executive of Grovest corporate advisory, section 12J of South Africa’s Income Tax Act allows investors to provide much-needed capital to small and medium enterprises while receiving an immediate tax deduction.
“Tax legislation such as section 12J and section 12B are playing a crucial part in helping to bring billions of rands in investment to this energy space,” he said.
Grovest had used these provisions to start two green energy funds, Decentral Energy and Rencell Limited.
“Both of these section 12J funds provide capital for hi-tech clean energy installations across the country, helping to power up businesses, retailers and residential developments,” said Miller.
He said the end result was that investors in the top tax bracket could see relief of up to 45% on their investments in the year they invest.
“For every R100,000 invested into a section 12J, the investor receives a tax deduction of R45,000, which means that only R55,000 is at risk, while the investor has R100,000 working for them,” he said.
Decentral Energy was mandated to invest in clean energy for commercial and industrial use, underpinned by long-term power purchase agreements.
These include small-scale photovoltaic power (solar) projects like those seen at Gauteng’s Northmead and Southdale malls.
They allow landlords to buy the energy produced and recover the cost from their tenants. Decentral Energy also launched the 5MW Kruisvallei hydropower facility in Ash River, Eastern Free State, as well as the 24MW to 40MW Meerkat hydropower plant near Hope Town in the Northern Cape, among others.
Rencell CEO Adriaan Erasmus said they were seeking to connect 6,500 residential complexes across South Africa with solar microgrids, taking 3,000MW off Eskom’s grid.
“Rencell can connect residential complexes to its solar microgrids as long as the body corporates provide the required resolutions for us to do so.
“Currently, Rencell has four projects that are still being finalised and we are in the process of obtaining the requisite financing and necessary approvals,” said Erasmus.
A recent success story, which has celebrated its first year of operation, is the renewable energy plant Ilanga 1, which has been supplying clean energy to the national grid.
This unique concentrated solar power plant contributes 100MW of on-demand power that is clean, while having no fuel costs nor harmful emissions.
It provides energy for around 100,000 homes and will save 90,000 tons of CO2 each year over 20 years.
“South Africa is facing many challenges with its energy supplies. But there are serious developments afoot that will result in renewable energy becoming more widely adopted as the years go by,” added Miller.
Access to the top content, vouchers and other member only benefits