As households and businesses with capital increasingly move towards renewable energy (solar + batteries), Eskom is left serving a shrinking base of paying customers while remaining responsible for electricity as a social good.
This dynamic places upward pressure on tariffs, weakens cross-subsidisation, and fuels a growing perception that renewable energy benefits only those who can afford it.
According to Mzansi Energy Consortium, left unaddressed, the clean energy transition risks becoming socially and economically divisive. A paradox where environmentally clean power entrenches socially dirty inequality.
Wessel Wessels, chief operating officer at Mzansi Energy Consortium, and founder and CEO of Journey2Green, says government may be misguided in taxing the importation of equipment. “While the ambition to develop domestic manufacturing capacity is understandable, it is misaligned with the realities of the global renewable energy industry.
“Solar panels, batteries and inverters are produced at enormous scale in highly automated facilities, particularly in Asia. A single modern production line can manufacture twice as many solar panels as South Africa consumes annually, employing as few as 50 people with robotics performing most of the work,” Wessels explains.
What also mustn’t be underestimated is the importance of safety for renewable energy products, especially BESS (Battery Energy Storage Systems).
It takes huge investment, and to make those investments you need economies of scale. For example, the total number of kWhs that just one major battery manufacturer damages annually as part of its safety testing is more than the total annual current kWhs manufactured in South Africa.
Automation plays a huge role in manufacturing renewable energy technology.
“By imposing duties and penalties on imported renewable energy equipment, the government effectively increases the cost of up to 90% of a solar project’s capital expenditure – the technology component,” says Wessels.
“The unintended consequence is that the remaining 10% – labour, services, installation and operations – is squeezed. But that is precisely where job creation should occur. Manufacturing may create a small number of wealthy local beneficiaries, but it will not create jobs at the scale South Africa needs.
“Rather, reduce the cost of that 90% and induce the EPC market to budget more for labour,” he adds.
Labour is the portion where broad-based, sustainable job creation is realistic: the services component of renewable energy projects.
Installation, commissioning, operation and maintenance are labour-intensive activities that can be anchored in rural and underserved communities where projects are built.
This approach is already being demonstrated in practice. On projects such as the Palabora Mining Company (PMC) solar plant – South Africa’s first grid-forming installation – Mzansi Energy has adopted an implementation model that brings original equipment manufacturers (OEMs) closer to the construction and commissioning process to enable skills transfer, while still maintaining traditional EPC structures required by financiers.
“The banks are understandably risk-averse,” says Wessels. “They want performance guarantees, balance sheet strength and proven delivery models.
“But that doesn’t mean innovation is impossible. By involving OEMs directly in installation, commissioning and long-term performance support, we reduce technology risk while freeing up space for local contractors and skills development.”
International technology vendors assume responsibility for complex system integration early on, while gradually training local teams to manage larger parts of the work in future projects. Over time, this enhances domestic capability without sacrificing safety, performance, or bankability.
The stakes are high. As renewable energy adoption accelerates, Eskom’s paying customer base continues to erode, placing greater pressure on tariffs and reinforcing the perception of electricity as a social entitlement rather than an economic good.
Without deliberate intervention, renewable energy could be viewed not as a solution, but as a contributor to South Africa’s electricity divide.
“The question is not whether renewable energy is good for South Africa – it is,” says Wessels. “The question is how it is implemented. If we want clean energy to unite rather than divide, we must focus less on where equipment is made, and more on who gets to work, learn and benefit from building it.”
Mzansi believes strongly enough in implementation skills to have created its own skills development initiative, “Mzansi Green Lights,” as part of the Palabora project.