GoSolr, a company backed by South African billionaire Patrice Motsepe and the continent\u2019s biggest bank, plans to spend R10 billion to roll out a model of renting solar panels and batteries to homes in the nation plagued by blackouts.<\/p>\n\n\n\n
The two-and-a-half-year-old company seeks to install about 500 megawatts of solar-generation capacity in four years. <\/p>\n\n\n\n
That\u2019s up from its current 70 megawatts, said Andrew Middleton, GoSolr\u2019s chief executive officer. <\/p>\n\n\n\n
It has attracted investment and financing from Motsepe\u2019s African Rainbow Capital Investments and Standard Bank Group<\/p>\n\n\n\n
The company, which says it\u2019s the biggest of its kind in South Africa, is one of a number capitalizing on the power cuts and surging electricity prices that have afflicted the country since 2008.<\/p>\n\n\n\n
The amount of rooftop solar in South Africa more than doubled to 5,440 megawatts in March from the year earlier. According to data compiled by the Johannesburg-based company, about 620 megawatts of that was on residential properties.<\/p>\n\n\n\n
\u201cThat\u2019s our mission,\u201d Middleton, 39, said in an interview at GoSolr\u2019s head office on Monday. GoSolr, together with \u201call the other companies combined, can end this crisis,\u201d he said.<\/p>\n\n\n\n
Middleton said future funding for the company will come in the form of debt and equity, with existing shareholders such as Motsepe\u2019s ARC and Standard Bank likely to contribute. <\/p>\n\n\n\n
While founders currently own less than half of GoSolr, they have retained voting control.<\/p>\n\n\n\n
Its subscription service competes with more expensive rent-to-buy operators and households that pay about R150,000 to install a standard system of eight solar panels and 5-kilowatt hours of battery storage themselves.<\/p>\n\n\n\n
While South Africa has some of the world\u2019s 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.<\/p>\n\n\n\n
According to GoSolr, 9.9% of the country’s power comes from solar energy, and 77% comes from coal.<\/p>\n\n\n\n
While solar doesn\u2019t produce greenhouse gas emissions, South Africa\u2019s dependence on coal has made it the world\u2019s 15th-biggest source of climate warming gases.<\/p>\n\n\n\n
Still, for most South Africans, the systems are unaffordable.<\/p>\n\n\n\n
GoSolr targets 2.2 million households that earn more than R360,000 a 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.<\/p>\n\n\n\n
With the national power utility Eskom Holdings Ltd. 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. <\/p>\n\n\n\n
Earlier this year, power outages known locally as load shedding sometimes extended to more than 10 hours a day.<\/p>\n\n\n\n
Middleton said his company, which charges between about R1,400 and R2,900 a month for most of its products, is looking into cheaper systems to target less affluent households.<\/p>\n\n\n\n
\u201cWe started at the core where we could get scale, and we can just understand how the equipment behaves and how the credit profile looks,\u201d said Middleton, a former investment banker. Then the company needs to determine whether it can \u201ccontinue to raise capital at scale,\u201d he said.<\/p>\n\n\n\n
After that, it will look at the broader market.<\/p>\n\n\n\n