Rolling out solar power for informal settlements
Zonke Energy says there is an urgent need and demand outstrips supply
South Africa faces a power generation crisis. Directly related to this crisis is a chronic need for clean and safe power in informal settlements. Approximately two million households live in communities without formal grid connections.
As highlighted in GroundUp’s recent article on the Umbane project, sustaining affordable energy services in these off-grid settlements is extremely difficult, especially without any ongoing subsidy support from government. But it appears the article has generated misconceptions about our approach, and we therefore feel it important to draw attention to the broader situation and efforts to address it, while also contextualising our own challenges so that others may learn.
Zonke Energy exists to serve families with safe, reliable and affordable power. Since 2021, we have delivered over 6MWh of clean electricity to a total of 160 households in one settlement, using a prepaid no-obligation model, starting at R5 per day. Of 11 solar towers installed, all but two are sold out, requiring us to turn away prospective clients due to lack of capacity.
Community members not yet served by Zonke Energy regularly approach us, imploring that we erect more towers. The demand is huge and our current capacity to meet it is limited.
Zonke Energy’s clients do not have formal, safe access to grid electricity. Instead they rely on hazardous liquid fuels and inyokayoka (illegal) connections. Our staff have witnessed electrocutions and the after-effects of shack fires caused by tipped lanterns and poor wiring. Incidents like these initiated our drive to work in Qandu Qandu in the first place.
The Umbane Project
From prior engagement with residents, we established that there is a large unmet need for refrigeration. In a sample survey of residents, 80% desired a fridge, and 50% said their food spoils at least every other day due to a lack of refrigeration.
Fridges and freezers are expensive to run using off-grid power, due to their high energy draw, requiring large batteries, PV panels, and electronics. However, by putting the fridge to productive use, its running costs can be offset with income from small enterprise activities such as selling cool drinks, meat or other products. So the Umbane project set out to find a way to make off-grid refrigeration more cost effective, while also cultivating a model for women-led entrepreneurship.
Seven solar towers were installed to power fridges and serve 100 households in the wider community. Each tower can power up to 16 households. Including four solar towers previously in service, a total of roughly 160 households in Qandu Qandu now use Zonke Energy.
For an upfront joining fee of R400, Zonke Energy installs R3,000 worth of equipment in the client’s home, including indoor lights, an outdoor security light, plug box, and distribution cabling.
Customers pay for electricity at a daily rate with no long-term obligations. The majority of these households pay only R5 per day for lights and phone charging, offsetting up to 8 litres of lighting paraffin per household per month, and dramatically reducing hazardous black carbon. The towers are 100% renewable, further offsetting carbon emissions.
Entrepreneurship training and its challenges
As part of the Umbane project, dozens of initial participants took part in a six-week entrepreneurship training course. From the initial group, 20 received additional mentorship, but this free service did not include money to assist participants in starting a business, and no such promise was made. The project did, however, offer subsidised access to a fridge, as well as a six-month payment plan (the fridges would otherwise have cost 40% more).
During a recent project evaluation conducted by the team, several participants reported that their start-ups were improving and sales were growing, with one claiming a tripling of revenue.
However, the project has of course not been without its challenges. First, despite our efforts at clear communication (using meetings, staff visits, calls, pamphlets, SMS, and WhatsApp), some misunderstandings about the energy service and pricing have surfaced. We met with each individual participant on a regular basis to answer questions and clarify how the service works.
Second, affordability has been difficult for some participants despite the business opportunity. Our first step to address this was to waive the joining fee. Then, in March we introduced a new business package at R14 per day, powering lights and phone charging in addition to the refrigerator. This price, while still high compared to grid costs (which they are unable to access), is competitive with the clients’ current alternatives.
For example, it is common to pay upwards of R300 per month to a neighbouring formal house for a backyard connection, plus R500-R800 for cable to reach the dwelling. In contrast, our service is safe and comes with support (we employ technical maintenance from within the community).
Further, it should be noted that indigent families with formal grid connections can access the Free Basic Electricity (FBE) subsidy, while off-grid households cannot. To its credit, the City of Cape Town recognises the issue and is discussing solutions. Such programmes are critically needed to open affordability up to more households.
We are working with all the participants to ensure that everyone benefits. We are active at this site and will continue to clear up misunderstandings and mismatched expectations.
The purpose of the Umbane project has been twofold. First, to test the idea that with access to training and power, women can generate revenue for their businesses and desperately needed off-grid services can be made more affordable. And second, to expand access to safe power for more of the community. The Umbane project has provided 100 families with access to safe power and seeded the growth of many women-led businesses.
Energy crisis demands a response
Despite the challenges, the chronic need for high quality services should compel government, civil society, and the private sector to continue developing creative solutions. The need is so great, and the crisis so urgent, that we must be willing to try new and innovative solutions even in the face of risk. That is where we are, working with communities to find sustainable ways to power their lives.
As demonstrated by our sold-out towers and constant requests for expansion, our service is highly valued in the communities we serve, and beyond. We believe that with effective policies and support, we and enterprises like ours can be major contributors to solving the South African energy crisis – especially for those currently suffering the worst effects of energy scarcity.
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