New rules will allow complexes and estates in South Africa to get off Eskom’s grid – what you should know

 ·28 Aug 2021

The newly-gazetted Electricity Generation Act regulations will allow private individuals and businesses to generate up to 100MW of electricity for their own use without obtaining a licence from the National Electricity Regulator, says Andrew Schaefer, managing director of property management company Trafalgar.

Schaefer said that municipal electricity tariffs have increased significantly in recent months, which has led to rental increase resistance among tenants.

“At the same time, South Africa has been experiencing more frequent and longer power interruptions due to the inadequate capacity available on the national grid as well as the poor maintenance of many local electricity networks and substations.”

However, the changes to the electricity legislation that were gazetted in August means that there is now a relatively easy – and cost-effective – solution to all these problems, he said.

“Sectional title complexes and gated estates will be able to install their own, private power plants that are capable of permanently generating enough energy to supply the electrical needs of all the homes in the scheme as well as the common property.”

He said that in most cases, these would be solar power plants, and there are already several companies with the expertise to assess the capacity that would be required and then install the right number of photo-voltaic panels (PVs) and batteries.

Schaefer said that some of these companies could also offer rent-to-buy options that would suit community housing schemes.

“Certain banks are now also willing to offer financing to sectional title schemes and estates for this type of “green” improvement, and the monthly rentals or repayments for the power plant equipment can easily be divided among the owners in a community scheme according to the same PQ ratios used to calculate levies.

“What is more, these payments are likely in most cases to be lower than the amounts they are currently paying for municipal electricity.”

Trustees and directors 

Schaefer said that installing a private power plant is not something that the trustees or directors of a community housing scheme can decide on their own.

In sectional title schemes, the trustees would need to suggest that owners approve the power plant as a ‘necessary’ improvement to the common property and give them 30 days to object or call a meeting in terms of the Sectional Title Schemes Management Act.

If there were objections or a meeting was called, a special resolution would have to be passed before proceeding, he said.

Schaefer said this requires a normal meeting quorum and a vote in favour by 75% of those present in both number and value.

Read: South Africa risks going down the same road as Zimbabwe with property change warns Western Cape government

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