GoSolr, a company backed by billionaire Patrice Motsepe and the continent’s biggest bank, plans to spend R10-billion to roll out a model of renting solar panels and batteries to homes.
The two-and-a-half-year-old company seeks to install about 500MW of solar-generation capacity in four years. That’s up from its current 70MW, said Andrew Middleton, GoSolr’s CEO. It has attracted investment and financing from Motsepe’s African Rainbow Capital Investments and Standard Bank Group.
The company, which says it’s the biggest of its kind in South Africa, is one of a number capitalising on the power cuts and surging electricity prices that have afflicted the country since 2008.
The amount of rooftop solar in South Africa more than doubled to 5.4GW in March from the year earlier. About 620MW of that was on residential properties, according to data compiled by the Johannesburg-based company.
“That’s our mission,” Middleton said in an interview. GoSolr, together with “all the other companies combined, can end this crisis”, he said.
Future funding for the company will come in the form of debt and equity, with existing shareholders such as Motsepe’s ARC and Standard Bank likely to contribute, Middleton said. While founders currently own less than half of GoSolr, they have retained voting control.
Its subscription service competes with more expensive rent-to-buy operators as well as households that pay the about R150 000 needed to install a standard system of eight solar panels and 5kWh of battery storage themselves.
Solar potential
While South Africa has some of the world’s best solar potential, just 0.7% of its 17.8 million households use the technology for electricity. That compares with 31% for Australia, 4% in the UK and 3% in the US.
Of the power generated in the country, 9.9% comes from solar and 77% from coal, according to GoSolr. While solar doesn’t produce greenhouse gas emissions, South Africa’s coal dependence has made it the world’s 15th biggest source of the climate warming gases.
Still, for most South Africans the systems are unaffordable.
GoSolr is targeting the 2.2 million households that earn more than R360 000/year and its subscription service is beginning to save clients money in Cape Town, which has the highest electricity costs of major South African cities.
With Eskom having won permission to raise tariffs by 12.7% this year, more than double the inflation rate, savings for solar users are expected to increase. Earlier this year, load shedding sometimes extended to more than 10 hours a day.
Middleton said his company, which charges between about R1 400 and R2 900/month for most of its products, is looking into cheaper systems to target less affluent households.
“We started at the core where we could get scale and we can just understand how the equipment behaves, how does the credit profile look,” said Middleton, a former investment banker. Then the company needs to determine whether it can “continue to raise capital at scale”, he said. After that, it will look at the broader market. — (c) 2024 Bloomberg LP