Structure your operations around load shedding
As far as you possibly can, find something productive for your staff to do when load shedding strikes – cleaning, fixing, training or planning – anything to keep them from becoming so demoralised that their normal productivity decreases. If you have never looked at increasing your productivity when the machines are running, now is the time to do that. Your operation has to become super flexible, which requires careful planning and effective team communication and management on your part.
Look wider than just your operation
Your business is part of a whole ecosystem, all of which is affected by load shedding. Even if you manage to keep up your productivity, your suppliers or your clients may be badly affected. Make sure that you maintain the correct stock levels by finding out how your suppliers and clients are coping with load shedding.
Get ready to invest in alternative power
Buying a solar system, a battery or a generator large enough to help your business cope with load shedding will most likely be a sizable investment requiring outside finance. Your first step is to make sure you are ready for a finance application by having your latest financial statements and updated management accounts on hand.
Do an energy audit on your business
You have to work out carefully how much electricity your operation needs, not just the total amount per day, week or month, but also how many watts your operation pulls at its peak. These figures are key to buying the right size system. If you buy one that is too small, you will remain vulnerable to load shedding, and if it is too big, you end up paying too much for electricity, some of which you won’t be using. An energy audit is a good opportunity to look for ways to save energy in your business and the possible future growth of your power needs. Don’t have the audit done by someone who wants to sell you a solar system or a generator – there is a risk that they might tweak the outcome of the audit to fit the system that they want to sell you. Rather hire an independent electrician or an electrical engineer.
Choose the right system for your business
The results of your energy audit is just the start of the calculations that you have to make to pick the right energy solution for your business. Which suits you best – a solar system, which is expensive to set up, or a diesel generator which is expensive to run? Can you afford a system that takes you off the grid completely, or mostly? Or will you have to make do with a minimal system just to tide your operation over the blackouts? Draw in your accountant or a finance professional for help with the calculations. Don’t neglect non-financial factors, such as noise issues with generators and wind turbines, or your landlord’s possible opposition to solar panels on his roof.
Choose the right installer
By now your investigations into the available solutions should have given you a sense of the major equipment brands in the market and who some of the local installers are. The industry is unregulated and is teeming with fly-by-nights who are looking to exploit the desperation of businesses, so make sure you get at least three thorough quotes, insist on references, and ask for their qualifications and compliance records. A master electrician who is registered at the department of labour should be on the safer side of the spectrum. The cheapest quote is not necessarily the best one.
Choose the right financier
In your affordability calculation you should have started looking at the finance options available. Topping up an access bond may be an option for you but shop around widely for specialist funds that offer favourable terms for businesses. Business Partners Limited, for example, offers five-year loans of between R250 000 and R2 million, with a 6-month moratorium on the first instalment to help with cash-flow. There are several service providers who offer rental or rent-to-own options, which may suit your business needs better.
Keep an eye on the market
The alternative-power industry in South Africa is constantly changing. Prices of solar panels, inverters and batteries are increasing rapidly because of the high demand. Make sure that you know how long a quote is valid for when you put in an application for finance and plan the installation schedule. There is another force of change in the solar and battery market. New and more powerful versions are constantly entering the market as technology evolves, but it is probably not worth waiting for the next improvement. If you choose the right system, it will serve you well for years, even if it rapidly becomes old technology.
Claim your tax credit
Remember that there is a tax benefit for SMEs whose loans are approved. These SMEs may be able to take advantage of the latest tax incentive, announced in this year’s Budget Speech. The incentive allows businesses to reduce their taxable income by up to 125 percent of the cost of their investment in renewables.
About the Author: Megan Dedekind
