Bronwyn Timm, SOLA GroupThe South African renewable energy sector is moving from momentum to maturity. Across industries, clean power isn’t perceived as a hedge against loadshedding anymore.

It has become a core business strategy thanks to a set of reforms and technologies that have made renewable energy more accessible and affordable.

Over the past 18 months, the structure of the market has changed thanks to policy reforms that have created a space for private energy generation, traditional wheeling and the launch of virtual wheeling.

The latter model allows companies to access renewable energy generated offsite through a system of rebates to match the power a business uses from the national or municipal grid with the clean energy generated from an IPP.

Eskom launched the framework to simplify access for corporates on Low Voltage Eskom connections and municipalities.

One of the first virtual wheeling electrons was with Vodacom and their PPA with SOLA Group went live in September 2025, making it the first in the country and on the continent to make the move to the virtual wheeling model.

It is a breakthrough moment, especially for small to medium enterprises. Renewable energy has become more accessible and affordable, without requiring that companies build their own physical plants or on-site installations.

It opens the door to clean and lower-cost power – a flexibility that means SMEs can balance their power needs against their budgets. They can buy renewable energy without owning infrastructure.

Traditional power purchase agreements (PPAs) often last as long as 20 years and require a significant long-term commitment.

The model ensured reliable power but also limited participation to large corporates and mining houses with financial heft.

With the virtual wheeling model now available locally, SMEs can enjoy the same benefits but with short-term, flexible contracts that are more aligned to their operational realities.

IPPs, like the SOLA Group, have developed rolling and short-term PPAs designed to offer companies flexibility and an immediate OPEX saving.

Translated, this means the barrier to entry is lowering so SMEs can secure renewable power without having to invest in panels on their roof.

This flexibility is deepened by the upcoming South African Wholesale Electricity Market (SAWEM) which is expected to go live in 2026.

It enables licensed market participants to trade energy as a commodity, which will increase both competition and transparency.

It will in time give SMEs the ability to then compare offers, buy from clean generators and manage energy costs more predictably.

Another factor that’s changing the renewable picture is the evolution of battery energy storage systems (BESS).

Global storage prices have dropped considerably, averaging $115 per kWh as of the end of 2024, according to BloombergNEF, and this cost reduction has made it feasible for developers to include batteries as standard in new projects.

This translates into consistent power as solar and wind output is now stored in batteries to provide energy on demand. The combination of virtual wheeling and storage is turning intermittent renewable generation into a 24/7 supply chain.

The next step is the grid itself. South Africa’s transmission network is nearing capacity in high renewable energy resource provinces like the Northern Cape which is sparking further discussion and investment into capacity to minimise the risk of energy disruptions.

As the SA energy market evolves, the conversation is moving away from loadshedding as companies ask whether they still need their own energy strategies.

The answer is yes. Energy self-reliance, particularly with clean energy, is a competitive advantage. It shields companies from price volatility and reduces carbon exposure; it also positions them for export markets that are tightening their environmental standards. Resilience is defined as flexibility and choice, and in a company’s ability to participate in a cleaner and smarter energy system.

Perhaps the most important outcome of these reforms is participation. SMEs employ nearly 60% of the South African workforce and yet have been historically excluded.

Virtual wheeling and flexible PPAs change the equation and allow SMEs to access the same cost benefits and sustainable credentials as large enterprises.

The ripple effect of this inclusivity is profound. When companies have access to cheaper and predictable energy costs, this improves their cash flow and competitiveness, with a knock on effect for communities and the economy.

A more distributed market reduces the strain on the national grid while stimulating economic inclusion.

As South Africa continues to decentralise its energy system, the next wave of growth relies on keeping this access open.

It’s become an integral part of the average South African’s daily routine – constantly checking the EskomSePush app for the latest loadshedding schedule. We rarely stop to think of the IT infrastructure that’s needed for us to quickly access the most recent update and continue with the rest of our day.

And so, the irony is that while businesses are looking to cut back on IT spend to cope with the economic impact of power cuts – loadshedding is yet another reason why organisations simply can’t afford to delay their digital transformation and forego the associated efficiencies.

Over the past few years, loadshedding has become the single-biggest hinderance to GDP growth in the country. And as the ramifications of loadshedding continue to undermine profitability, business costs have become the number one risk to their stability.

A clear trend we’re seeing as power cuts worsen is a slow-down in IT spending, particularly as organisations reroute budget to backup power in the form of generators or solar batteries. Indeed, more than a quarter of South African CIOs say their IT budgets either remained flat or decreased in 2022. And another 38% say they’ve increased only to accommodate inflation.

At the same time, the expectations for IT and the wireless network get bigger and more complicated all the time. IT leaders are under pressure to increase day-to-day efficiencies in a secure and sustainable way, while also driving product innovation and creating room for new revenue opportunities. And all this while navigating shrinking budgets and a growing power crisis. 

But the good news is there are ways of making your IT budget stretch further without compromising on your digital transformation objectives. A cloud-managed network solution, for example, can help you reduce ongoing expenses and incur costs only as and when needed.

Here are four ways a cloud-managed network will enable businesses to achieve more despite loadshedding.

1. Make IT more efficient

Connectivity challenges are still run of the mill for many businesses, with the IT team often at the receiving end of regular complaints about the Wi-Fi being down. A cloud-managed network comes embedded with tools to handle reactive tasks on behalf of your IT team.

This ultimately saves the network team significant time responding to problems, trying to figure out where they are occurring and then recreating them in the field before responding. Instead, the cloud-managed service will give them immediate insight into what’s causing the problem and enable them to keep the network up and secure with much less effort, allowing IT to be as productive as possible, spending more time on activities that can have a bigger impact on the business and potentially drive greater revenue.

Not to mention the amount of frustration this saves!

2. Spread out costs over time

Adopting a cloud-based management platform will also enable your business to shift from hardware-based infrastructure that requires heavy capex investment to an opex model. It’s a way of running your IT that is much more budget-friendly because you can spread your expenses over time and spend on additional capacity as and when it’s needed.

Essentially your business will start saving money immediately.

What’s more you can take the budget that would originally have been spent upfront and direct it towards other activities that will have a greater effect on the bottom line.

3. Preserve your investment

The level of flexibility that comes with a cloud-managed network means you can adapt as your business needs change.

Ultimately, this helps you avoid having to replace all your management hardware and losing your initial investment in that infrastructure.

With the pace at which business is evolving, this can end up creating significant cost savings over the long run.

4. Save on energy costs

With less management hardware to worry about, you’ll also be using less energy and power to cool the appliances, which helps with cost savings, especially during times when you’re having to rely on backup power solutions.

At the same time, the IT team will save in time and effort, spending fewer hours maintaining the rack and upgrading the system on a regular basis.

Shifting to a managed network service with a partner like Aruba can give you a network experience that works in line with your budget and doesn’t compromise reliability, performance or security.

While it might be tempting for businesses to delay IT spending while they ride out the storm of power cuts, loadshedding isn’t going anywhere anytime soon.

A sound long-term strategy for success needs to factor in the ways in which technology can help your business cut costs today while also helping to make your business more profitable tomorrow.

Loadshedding isn’t a reason to avoid investing in technology but rather a reason to reassess how you invest in that technology.

MTN Group has reported a strong 2022 financial performance. In the report, the Group demonstrated strong expansion in return on equity to 23.4% and a 10% increase in the dividend to 330 cents per share, “in a challenging macroeconomic environment of elevated inflation across our 19 markets”.

In the year to 31 December 2022, total subscribers rose 6% to 289 million, with data subscribers growing by more than 12% to 137 million and Mobile Money users up by 21% to 69 million, according to the report on the Group’s website.

Demonstrating good operational execution and ongoing strategic delivery, in constant currency terms the Group reported a 15.3% increase in service revenue to R194 billion (N4.8 trillion naira) and maintained a stable margin on earnings before interest, tax, depreciation and amortisation (EBITDA) of 44%.

EBITDA increased by 14.3% to R90 billion (about 2.2 trillion naira). It was supported by the Group’s expense efficiency programme which yielded R2.7 billion in savings, mostly in Nigeria and South Africa.

The structurally higher demand for data and fintech services was sustained, with data traffic and fintech transaction volumes increasing by around a third each,” said Ralph Mupita, MTN Group President and CEO. “To support this, we invested more than R38 billion in our network, IT and platform infrastructure – an increase of 17%, while at the same time reducing consumers’ average cost to communicate by nearly 23%.”

The network investment expanded access to broadband services to almost 88% of the population (from 83% in 2021) in the MTN Group’s markets as we focused on rural rollout, extending digital inclusion across Africa.

Our contribution to society also included income taxes of approximately R14 billion paid to nation states in the year.

In South Africa, the Group lamented the impact of loadshedding which is not too far from the case in Nigeria where public power supply has been epileptic.

“Alongside the increase in capital investment, our proactive commercial, expense efficiency, supply chain, network and financial resilience interventions helped alleviate the impact on results of a tough operating environment. This included – across markets – high inflation and interest rates, weak local currencies, pressure on disposable income and in South Africa, the significant impact of severe loadshedding.

“The performance of MTN South Africa was solid, with growth in service revenue of 3.6% to almost R41 billion and an EBITDA margin of 39.2%.

Loadshedding impacted EBITDA by R695 million as the Opco incurred additional expenditure to meet the requirements of power, security and repairs, the latter due to the vandalism of sites.

On MTN South Africa, Mupita said: “We are encouraged by the performance of the business and the focus on network resilience. Amid unprecedented loadshedding and the intensified need for back-up power in the second half of 2022, MTN South Africa invested significantly to secure network resilience.”

He added: “With the state of disaster regulations gazetted, South Africa now has a unique opportunity to accelerate efforts to secure the resilience of critical national infrastructure such as telecommunications. Government and business must jointly seize this moment and act decisively to deal with the quadruple crises of energy; logistics; crime and corruption; and youth unemployment. Inaction risks South Africa being a failed nation state.”

“Across our markets, we continued to execute on our four strategic priorities. To build the largest and most valuable platforms, we expanded our fintech ecosystem and made progress in separating our fintech business from our GSM business, receiving offers for strategic minority investments into the MTN Group fintech structure. We anticipate completing the process to review offers and engage investors in May 2023.

“To drive industry-leading connectivity operations, we increased voice, data and fintech revenue, rolled out more than 5 000km of fibre and invested in subsea cables.

“To create shared value, we reduced our scope 1 and 2 emissions in pursuit of net zero by 2040. Diversity and inclusion remained central to our efforts: we achieved 40% women representation, moving closer to our 2030 target of gender parity.

“We also accelerated portfolio transformation, recording proceeds from asset realisations of R12 billion and signing a share purchase agreement with a subsidiary of M1 Group Limited to acquire all our shares in MTN Afghanistan for a gross consideration of US$35 million.

Looking ahead, we remain focused on executing on our Ambition 2025 strategy and maintain our guidance for performance over the next three to five years, despite elevated macroeconomic risks in South Africa and Nigeria.

In 2023, MTN Group plans to invest more than R37 billion in networks and platforms, across its markets; the company will spend R9 billion on the South African network.

Facilities like Teraco, Vantage, NTT, and ADC have opened and grown in recent years due to increasing demand from enterprises suffering from continued loadshedding.

But what are the benefits?

The biggest drawcard of colocation facilities worldwide is the specialised services they offer. These providers have expert facilities managers who have skills in security, power, and cooling – which few enterprises will have in their own data centres.

This division of labour lowers risk and addresses many of the concerns enterprises have in running their own data centres.

The second reason for the growth in colo is connectivity. The better colo facilities have free peering points as well as private exchanges that serve as onramps into local and hyperscale cloud providers.

The prevalence of good value, fast and reliable connectivity into the data centre now makes colocation an acceptable option.

In South Africa, of course, there’s a third – and very important – reason: colo offers reliable power during rolling power cuts.

Enterprises using cloud also get these same benefits, reducing and segregating the operational risk by not having to rely on employees to manage the infrastructure. VMware Cloud, for example, offers migration tools as part and parcel of the solution.

And the pitfalls

Enterprises using owned hardware in colocation benefit from this reduced risk, flexible connectivity, and reliability. But of course, you pay for it. This means it’s not for everyone, but for those who do go the colocation route, the pricing is at least very predictable.

There are several examples in developed countries of unexpected overspending running wild following the move of traditional IT operations-based infrastructure into hyperscale cloud.

This has led to repatriation onto owned infrastructure or private cloud offered by local cloud operators with predictable price models. But in South Africa, we have the benefit of learning from such overseas mistakes.

Without going the overspending route, we already know that the next step is migration onto the cloud, with a combination of hyperscalers such as AWS or Azure and private cloud solutions such as VMware. And, for those currently running their own data centres, a colo solution to boot. This means more predictable pricing, a cloud solution suited to each particular workload, as well as reduced risk and improved connectivity and reliability.

Finding the right balance

Of course, the most important condition for colo and cloud to be viable is fast, reliable, cheap internet – typically provided by fibre optic cable. Fibre has finally penetrated all South African metro areas, making colo and cloud sustainable solutions.

Realistically, most enterprises will benefit from not just choosing between colocation and cloud, but a combination of both – and using multiple cloud providers.

Overseas examples, unfortunately, have made people reasonably sceptical of cloud hyperscalers. The internet is littered with case studies of enterprises failing to complete the migration to hyperscale cloud due to operational difficulties after replatforming traditional workloads.

Again, we get to learn from their mistakes: moving everything onto a hyperscale cloud seems like a straightforward solution, but the reality is that every cloud provider is not fit-for-purpose for every app.

Picking a single platform to keep things simple can mean suffering performance or commercial problems. Using multiple providers introduces complexity to your final solution, but each set of workloads will be in an ideal place. It’s crucial to choose the right environment for the right app. For this reason, that first step into a colo data centre is easier to swallow than a full migration onto cloud, and a good way to get started as it frees resources to plan and execute further app migration.

Security considerations should be overarching when looking at any kind of hybrid or multi-cloud solution.

Combining colo and cloud in a well-connected data centre should facilitate fast, secure, private extension between owned hardware and private and public cloud.

There is no one solution for every enterprise. Many enterprises need to be responsible for their own hardware for security and compliance reasons, making colocation and cloud not viable for certain workloads.

The key is to do an audit of your enterprise’s workloads and find the ideal solution for each – whether that’s colocation, cloud, running your own data centre, or a combination of all of the above in different measures.