KZN South Coast boasts investor potential in the renewable energy sector

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The case for renewable energy to support a clean economy has been made abundantly clear over the past few years, and while still relatively unexplored on the KwaZulu-Natal (KZN) South Coast, there is extensive potential for investment in this green economy as demand continues to grow.

Solar, wind, and hydro-power are all viable options on the sunny KZN South Coast and are supported by government’s latest tax incentives and the favourable price of green energy material.

As part of its mandate to uncover investment potential in the clean economy, South Coast Tourism & Investment Enterprise (SCTIE) attended this year’s Africa Energy Indaba conference and exhibition in Cape Town in March. Attended by the South African Department of Mineral Resources and Energy, the African Union Development Agency, and African energy industry associations, the event provided invaluable business growth opportunities for the continent’s energy sector.

“The message is clear; renewable energy is not simply a viable alternative, it is fast becoming the alternative which means significant investment is set to be unlocked,” commented Phelisa Mangcu, CEO of SCTIE. “On the KZN South Coast, with our abundance of sunny days and coastal location, the region is primed for sector growth, it’s just a matter of taking advantage of the opportunities available.”

According to Trade & Investment KwaZulu-Natal, renewable energy is the only electricity generation technology with decreasing prices. The investment promotion agency states: “…With solar PV module prices falling by 80% during the past five years, while wind turbines have become 30% less expensive. South Africa’s wind resources are regarded as amongst the top five in the world and could sustain 25% of our grid’s capacity.”

The agency outlines that in KZN (inclusive of the KZN South Coast), the renewable energy sector opens up several investment opportunities. Among these are the installation and supply of solar water heaters and heat pumps to the many real estate developments, industrial and retail developments, as well as solar, wind and hydro energy solutions for business operations. The established agricultural sector also has the potential for biomass production to support bioenergy production – biogas and biofuels – through agricultural residue.  

Chris de Klerk, CEO of Renu Holdings (Pty) Ltd, a subsidiary of the Halfway Group of companies based on the KZN South Coast, said renewable energy projects have seen major growth in the industry as the demand for reliable, clean power grows.

“The soaring fossil fuel prices are having long-term effects on business profitability and on the cost of living in private residences,” explained De Klerk. “Historically, the decision for renewable projects was primarily based on reducing operational expenditure, but with the ever-declining supply of constant power, projects are now largely based on ensuring energy security and independence.”

He explained that Halfway Group’s footprint on the KZN South Coast has enabled the rollout of numerous projects for non-group companies and residential clients.

“The KZN South Coast has, in the past, been an area of limited development and no real appetite for investment. This has changed with the boom in real estate due to its proximity to Durban offering a relaxed environment and beautiful scenery. With this change in economic growth, so has the requirement for self-sustainability.”

Investors in renewable energy are further benefitting from the National Treasury announcements regarding two renewable energy tax incentives. Under the enhanced renewable energy tax incentive, business owners can claim a 125% tax deduction (in the first year) for qualifying capital expenditure in respect of all renewable energy projects, with no threshold on generation capacity. The rooftop solar tax incentive also gives tax rebates to the value of 25% of the cost of any new and unused solar PV panels, up to a maximum of R15 000.

To learn more about these and other investment opportunities, contact SCTIE, the KZN South Coast’s One-Stop Shop for investment at 039 682 7944, email info@sctie.co.za or visit www.investkznsouthcoast.co.za.