How to save with renewable energy

My Business  Written by Monique Vrey

03 November 2017

If you’re a business owner, or someone who works in the commercial or industrial space, you’ve probably thought about your energy consumption and how much it’s costing you. If you’ve had these thoughts, renewable energy and the peace of mind that goes along with it has probably popped into your mind too. We recently spoke to Justin Schmidt, Head of Renewable Energy Africa at Absa, and got him to answer all of those pressing questions around this ever-changing source of energy.

According to Schmidt, the first thing you need to know is that this technology is not as expensive as you might think, plus it will also last a lot longer.

Before we explain why it’s a cost-effective option, it’s important to define exactly what is meant by ‘renewable energy’. Schmidt explains that this is any form of energy generated through natural processes (like sunlight) that can be replenished over a period of time. In contrast, energy that depends on finite resources such as coal or gas are called non-renewable.

In recent years, renewable energy technologies have evolved at an incredible rate, with more options than ever for commercial and industrial use. “Though solar photovoltaic (PV) solutions are most widely used, you also get other energy types. This includes wind, which we don’t usually use in the commercial and industrial space, and biomass, which includes more commonly known types of energy which includes wood, biofuel or biogas.”

Schmidt adds that they haven’t seen much uptake in the last two technologies, “Then there’s also hydroelectricity, which is energy generated through water. This could be applicable to farmers with a lot of access to water (through a river or dam), not businesses in the commercial and industrial space.”

So, how do you know which of these options will give you the best results and save your business the most money in the long term? According to Schmidt, solar PV is definitely the best option if you’re looking for a long-term investment. “When we look at where the industry currently is, and where it’s going, we see a lot more applications for solar than we do for other technologies. It has been proven to work effectively, and the costs are competitive against your normal electricity bill. This doesn’t mean that the other technologies won’t work well, it’s just that solar is the most tried and tested method.”

South Africa is particularly well-situated for solar energy, explains Schmidt, “If you look at our radiation levels – the amount of sun energy you get in an area – we’re listed as third in the world. We get a lot of sunlight, which means you can produce a lot more power in a smaller area.”

Still unsure whether your business should go solar or not? Here are a few additional pros and cons to help you make the decision:


  • The technology is tried and tested and has been massively improved over the past few years.
  • Over the past few years, the price of solar panels has decreased in leaps and bounds.
  • Climate change is affecting rainfall and climate around us. The more we move toward renewable energy sources, the more we’re able to take strain off the environment.
  • The Treasury has introduced tax incentives (section 12B) to allow for solar PV installations less than 1 Megawatt to be depreciated in the first year. This benefits the cash flows of the project and helps you pay off this technology a lot quicker.
  • Most solar panels have warranties of seven years on the actual hardware and performance warranties of up to 25 years. If properly installed and maintained (through an operation and maintenance contract), this technology will last for a long time.


  • There is currently some uncertainty around particular renewable energy rules and regulations that have not yet been signed off. However, once the draft regulations on Small Scale Embedded Generation in South Africa is passed, renewable energy for installations less than 1 Megawatt will gain traction thanks to the greater certainty on issues like licencing, banking, and so forth. Companies will begin to utilise solar power and other forms of renewable energy as a long-term asset. The industry itself is already working to overcome the uncertainty through initiatives like the PV Green Card, which was launched by the South African Photovoltaic Industry Association (SAPVIA) on 26 May. This illustrates the commitment of the industry in introducing standards that will move the country forward on its renewable energy journey by ensuring compliance of solar PV installers. Many municipalities are also pro-renewable energy and have developed rules and regulations around this.
  • If your business requires power usage 24 hours a day and doesn’t follow the sun’s production schedule, depending solely on this technology probably won’t work for you as the cost of batteries may be prohibitive.

According to Schmidt, his department has seen more and more customers who are interested in renewable energy, “That’s why we continue to research the other technologies, so that we can introduce customers to the right suppliers and ultimately help them fund these projects. We want to enable our customers on this journey.”

If you want to know more, read our blog post on renewable energy’s benefits in winter, or give us a call on 08600 08600.

Disclaimer: The advice contained on this blog is for general purposes only and does not take into account individual circumstances, objectives or financial needs. Accordingly, readers are advised to seek appropriate advice from licensed professionals prior to making any investment, or taking up a financial product or service.