Stellenbosch Municipality
Stellenbosch Municipality receives award for iShack

by Stephanie Nieuwoudt

Stellenbosch Municipality in September received a Highly Commended Award from the South African National Energy Association (SANEA) in recognition of an innovative solar power project. This project provides energy to 750 iShack households – which translates to about 1700 residents – in the informal settlement of Enkanini.

 

“Research showed that the most urgent need among residents of Enkanini was electricity. The municipality was in no position to provide electricity and therefore investigated alternative methods of energy provision,” explains Mr André Treurnich, Manager in the Treasury Office of the Municipality.

 

It was decided that the provision of solar energy could be a viable alternative to conventional electricity,”

In 2013 service providers were invited to tender for the project of supplying energy. The tender was awarded to the Sustainability Institute Innovation Lab (SIIL) which in 2013 had applied and received for a R17 million grant from the Green Fund.

“The project is a social enterprise that delivers fee-for-service off grid solar electricity to the residents of Enkanini. This gives them free maintenance and battery replacement. User-fees are kept as low as possible to cover the running costs without extracting profits,” explains Mr Damian Conway of SILL. “Residents join the service on a voluntary basis.”

The objective is to demonstrate a large scale, sustainable model for incremental informal settlement upgrading using off-grid solar technology.

“The sustainability focus of the project is social and financial – it has to be financially self-sufficient in the long run,” says Conway.

The project has built-in socio-economic benefits for the community. Carefully selected locals are trained by SILL to do the installation and maintenance work. Financial self-sufficiency relies on all users paying their service fees and on the free basic electricity (FBE) subsidy from the municipality.

This means that in this instance SILL is a service provider to Stellenbosch Municipality in the delivery of basic energy service although the bulk of the running costs are still covered by the end-users.

SIIL has a service level agreement (SLA) with the municipality whereby the municipality subsidises the running costs of the solar electricity service to each end-user.

According to Conway it is the stated intention of the Department of Energy that the FBE subsidy should be used for this kind of off-grid electricity service, in the absence of grid connectivity.

“As far as we are aware Stellenbosch Municipality is the first municipality in the country to find a way, compliant with the Municipal Finance Management Act, to allocate the subsidy to the running costs of an urban off-grid service delivered by a private service provider,” says Conway. “It is an innovative precedent that will hopefully be followed by other municipalities to serve their constituents while they wait for grid connections which can often take many years.”

iShack clients pay a monthly service fee of R150 per month for 11 months of the year. December is free or discounted pro-rata.

“Quite a few residents struggle to keep up the monthly fees and for them we are trialling a Pay-As-You-Go package, which is more flexible, though similarly priced,” says Conway.

Each household gets a separate solar home system installed in their home. This includes two inside lights, an outside security light, a television and a plug box for cell-phone charging and other low-energy appliances – such as radios and music amplifiers.

“To date, the TV has been provided on a rental basis and is included in the price, but we are in the process of reviewing this aspect. Ideally the end-user should purchase their own TV and TV licence. In order to get the demonstration project established, SIIL has provided a very cheap rental service during the first two years of operation. Also, since the technology is all quite new we wanted to protect the clients by taking responsibility for dealing with suppliers for maintenance and warrantee issues.”

According to Treurnich benefits of this project include: reduced financial burden on municipal emergency services (reduced risk of shack fires); fewer respiratory health problems; fewer incidences of illegal electricity connections and associated risks as well as capacity building and skills development.

“The iShack project is not the answer to Stellenbosch’s great housing needs. But the SILL project helps to bring dignity to lives of residents,” says Conrad Sidego, Executive Mayor of Stellenbosch.

“The advantages of reduced shack fires ties in with the Municipality’s vision of being the safest valley. Furthermore, skills development is extremely important in helping people to lift themselves out of poverty. And with the expected rise in solar energy installations, those who are trained in installing and maintaining the system are being prepared for the future.”

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