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Saturday, June 15, 2024

Renewable energy and SMEs: Debunking the myths

In South Africa today, businesses of all shapes and sizes are grappling with the challenges of high electricity costs and low reliability. If the recent increases in the frequency and intensity of load-shedding are anything to go by, the challenge of energy insecurity is set to plague businesses for many years to come, making it imperative for Small and Medium Enterprises (SMEs) particularly to arm themselves with accurate information about the renewable energy options available to them.

According to Kyle Durham, Head of Sustainability for FNB Business, myths and misconceptions abound in the commercial renewable energy space, which can make it difficult for SMEs to tell fact from fiction when making decisions about self-generation. He highlights five of the most common of these myths, and provides clarity to those considering the shift to renewable energy sources:

Myth 1. Renewable energy is more expensive than grid-based electricity. Despite widespread perceptions, the reality is that renewable energy, particularly solar power, can be far less costly in the long term than grid-based power. “While the initial investment in renewables is undoubtedly significant, the long-term savings on operational costs and the lower dependence on grid electricity – which is set to continue rapidly rising in price in the coming years, make renewable energy the financially wise choice for any business,” Durham explains.

Myth 2. Renewables like solar are too expensive and complicated to install. The cost of solar energy systems has decreased due to technological advancements and market competition. Durham also emphasises that there are many ways to offset the costs of installation. “Various financial aids, such as the Government funded Energy Bounce Back Scheme, subsidies and tax rebates, are available to businesses in South Africa, and banks like FNB also offer generous finance arrangements,” he explains, “which makes the self-generation much more accessible for SMEs than it has ever been in the past.” And while he agrees that the installation process can be perceived as daunting, it is actually relatively simple and quick, provided you make use of qualified and experienced professionals. “Many of the legitimate installers in South Africa even have the ability to manage all required permits and inspections on behalf of their business clients, making the transition to renewables seamless and smooth,” he points out.

Myth 3. My electricity usage is too high for me to benefit from renewable energy. The truth is that renewable energy solutions are fully scalable and the only real limitations on what an SME can install are their budget and the space available for the required hardware – particularly in the case of solar panels. However, Durham also explains that renewable energy doesn’t have to be an ‘all or nothing’ arrangement. “Partial renewable energy use, in combination with grid-based power, can still lead to significant savings and enhance energy independence for any business,” he says.

Myth 4. Your business has to have lots of roof space to be able to move to renewable energy. Durham highlights that there are many alternative renewable energy solutions for businesses with limited roof space, or no access to roof space at all. “SMEs could also consider other approaches, like ground-mounted systems or solar carports.

Myth 5. Moving to renewables won’t make a difference. Durham highlights the importance of considering all the benefits of transitioning a business to renewable energy, not just the financial advantages. “While reducing your dependence on municipalities and Eskom electricity is a key benefit, adopting a renewable energy strategy also brings many other benefits,” he explains, “including more reliable electricity supply to allow your business to operate through loadshedding, as well as a reduced carbon footprint and more support of environmental sustainability, both of which resonate with an increasingly eco-conscious consumer base in South Africa.”

Myth 6. Renewable energy storage is prohibitively expensive. Energy storage systems, like lithium-ion batteries, have evolved massively in recent years, and now offer highly efficient, durable and affordable options. “The reliability that good energy storage sources provide, especially during power outages, can be a game-changer for businesses,” says Durham, “and the technology used in modern battery manufacturing means most will last at least 10 years before needing to be replaced.”

Durham explains that, for SMEs in South Africa, understanding the realities and truths around renewable energy has become a critical determinant of sustainable success. “The lingering myths and misperceptions about renewable energy are preventing many SMEs from enjoying the many benefits for their businesses of more reliable, affordable, and sustainable power provision, he says, “and with the right information and committed support from a renewable energy funding partner like FNB and WesBank, alternative energy sources like solar and wind power can be a strategic asset to help businesses thrive in our increasingly challenging energy landscape.”

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