As renewable energy gains momentum in South Africa, no longer just a backup to Eskom’s unreliable power supply, it offers a unique opportunity for the country’s small to medium-sized enterprises (SMEs).
Over the past 18 months, the market structure has changed thanks to policy reforms that have created space for private energy generation, traditional wheeling and the launch of virtual wheeling.
Breakthrough moment
The latter model allows companies to access renewable energy generated off-site through a system of rebates to match the power a business uses from the national or municipal grid with the clean energy generated from an IPP (independent power producer).
Eskom launched the framework to simplify access for corporates on low-voltage Eskom connections and municipalities.
One of the first virtual wheeling electrons was with Vodacom.
The mobile operator’s PPA with Sola Group went live in September 2025, making it the first in the country and on the continent to adopt the virtual wheeling model.
It is a breakthrough moment, especially for small to medium enterprises.
Renewable energy has become more accessible and affordable, without requiring that companies build their own physical plants or on-site installations.
It opens the door to cleaner, lower-cost power, a flexibility that allows SMEs to balance their power needs against their budgets.
They can buy renewable energy without owning infrastructure.
Flexibility
Traditional power purchase agreements (PPAs) often last 20 years or more and require a significant long-term commitment.
The model ensured reliable power but also limited participation to large corporations and mining houses with financial heft.
With the virtual wheeling model now available locally, SMEs can enjoy the same benefits through short-term, flexible contracts that better align with their operational realities.
IPPs have developed rolling and short-term PPAs to offer companies flexibility and immediate OPEX savings.
Translated, this means the barrier to entry is lowering, so SMEs can secure renewable power without investing in rooftop solar panels.
This flexibility is deepened by the upcoming South African Wholesale Electricity Market (SAWEM), which is expected to go live in 2026.
It enables licensed market participants to trade energy as a commodity, thereby increasing both competition and transparency.
It will, in time, give SMEs the ability to compare offers, then buy from clean generators and manage energy costs more predictably.
Another factor that’s changing the renewable picture is the evolution of battery energy storage systems (BESS).
Global storage prices have dropped considerably, averaging $115 per kWh as of the end of 2024, according to BloombergNEF, and this cost reduction has made it feasible for developers to include batteries as standard in new projects.
This translates into consistent power as solar and wind output is now stored in batteries to provide energy on demand.
The combination of virtual wheeling and storage is turning intermittent renewable generation into a 24/7 supply chain.
Self-reliance
The next step is the grid itself.
South Africa’s transmission network is nearing capacity in high-renewable energy provinces like the Northern Cape, sparking further discussion and investment into capacity to minimise the risk of energy disruptions.
As the SA energy market evolves, the conversation is shifting away from loadshedding as companies ask whether they still need their own energy strategies.
The answer is yes. Energy self-reliance, particularly with clean energy, is a competitive advantage.
It shields companies from price volatility, reduces carbon exposure, and positions them for export markets that are tightening their environmental standards.
Resilience is defined as flexibility and choice, and as a company’s ability to participate in a cleaner and smarter energy system.
The most important outcome of these reforms is participation.
SMEs employ nearly 60% of the South African workforce and yet have been historically excluded.
Virtual wheeling and flexible PPAs change the equation, allowing SMEs to access the same cost benefits and sustainable credentials as large enterprises.
The ripple effect of this inclusivity is profound.
When companies have access to cheaper, more predictable energy costs, this improves their cash flow and competitiveness, with a knock-on effect for communities and the economy.
