In South Africa, 47% of the national population is energy poor, meaning that they spend more than 10%-15% of their income on power and still do not have nearly enough for their basic needs.
The problem is getting worse as informal or shack settlements continue to grow. This growth has accelerated since the Covid-19 pandemic. The number of households exposed to precarious energy conditions is rising.
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As an urban geography researcher, I was part of a team that studied Qandu Qandu, an informal settlement in Cape Town, from 2020 to 2023. We explored whether solar power and entrepreneurship training could help households cope with unreliable, unaffordable and unsafe access to electricity.
Qandu Qandu is a community of over 4,000 families living in self-built shacks made of corrugated metal. It was founded in 2018 and is about 35km from the Cape Town city centre, on the eastern edge of Khayelitsha (which means “New Home” in isiXhosa). This area was set up in 1983 by the apartheid government after it forcibly removed Black people from central Cape Town.
Most of Qandu Qandu has no formal connection to the electricity grid and residents use illegal (and unsafe) grid connections, paraffin and candles. These are health and fire risks. The unreliable power and limited internet access make it harder for people to work, study and find opportunities online.
We wanted to understand how energy access in informal settlements can support small businesses, digital services, skills development, jobs and community growth – do more than just supply light.
We installed mini-grids and home solar units. We also helped residents develop business skills so they could use solar-powered fridges and freezers in their small enterprises. Our findings were based on interviews, focus groups, surveys and hands-on work in Qandu Qandu.
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The law calls for universal energy access for all South Africans, at affordable prices, and free basic electricity for poor households. For years, South Africa’s strategy was to expand the electricity grid and connect everyone. But many people are still waiting, often in areas that are difficult to electrify. The challenge is finding quicker, more flexible ways to provide energy while communities wait for full connections.
Our findings show that solar electricity is a very promising way to reduce energy poverty and make electricity more affordable. When linked to things such as solar-powered productive use appliances, solar electricity can also improve people’s opportunities to generate income. City governments should do more to encourage off-grid solar solutions through schemes such as solar subsidies.
Solar grants
In late 2024, work started on the innovative Basic Solar Grant project, funded by InnovateUK, the UK government’s innovation arm, under its Energy Catalyst grant programme. Two South African solar companies – Zonke Energy, a minigrid-based firm, and the iShack Project, which offers solar home systems – together with the University of Exeter and UK-based development project management services firm Futures Advisory Limited, set up completely new minigrids and installed solar home systems in Qandu Qandu for the first time.
Qandu Qandu residents who signed up to this solar electricity were then offered a basic solar grant (a subsidy). This grant filled a gap. People in South Africa are entitled to a level of free basic electricity but can only get this from the national grid. Shack settlement residents therefore rarely have a way to access the free power. But with our basic solar grant model, these off-grid households could for the first time receive their free basic energy.
The project tested whether private companies could run solar mini-grids and home solar systems using a municipal subsidy to reduce the cost for residents. The idea is that city administrations should adopt this model by working with private companies to make affordable solar power available in informal settlements.
To date, the basic solar grant is the largest alternative energy provision system in Cape Town that we are aware of. Most of its funding is from overseas funders and the project ends in 2027. A key challenge is whether the city will use the learnings from the project to electrify other shack settlements.
How the basic solar grant model works
Rather than waiting years for a full grid connection that may never happen, households can get access to subsidised electricity straight away through solar mini-grids and home solar systems.
What is new about this approach is that it does not try to replace grid electricity, or create a separate long-term energy system for informal settlements. Instead, it uses existing electricity subsidies to support households facing the worst energy poverty while they wait for formal connections.
The model recognises that informal shack settlements are not just places waiting for services. They are vibrant communities with local knowledge, businesses and strong social networks that can help improve living conditions.
What needs to happen next
Research in Qandu Qandu found strong interest in solar electricity. Residents recognised that the basic solar grant makes it more affordable. The project also showed that private solar companies can successfully deliver energy services and manage grant-funded support in informal settlements.
The next step is to keep the pilot running, which will require support from the City of Cape Town. Fortunately the city has already committed in its 2050 Energy Strategy to make a basic alternative energy subsidy a priority. This will need the city to work with solar companies, which can administer the subsidy. While the subsidy should go straight to informal settlement residents, this is also a benefit to solar companies: the grant effectively enables their services to become more affordable, and they can secure more customers.
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At the same time, the city gains because it pays only for the grant. It doesn’t need to pay for the installation, operation and management of the solar infrastructure.
In the longer term, cities will need to rethink electrification as informal settlements expand. In areas where extending the grid is slow, decentralised clean energy offers quicker, more flexible and lower-cost access to power, while also reducing reliance on unsafe practices like illegal connections.
This article was co-authored by Damian Conway (iShack Project), Alex Densmore (Zonke Energy) and Hendrik Schloemann (Zonke Energy).
This article was originally published on The Conversation. Read the original article.
