With local businesses and households consistently struggling with energy-related challenges, including rising electricity tariffs that are exerting financial pressure across the board, financial institution Standard Bank Business and Commercial Banking executive head for energy, infrastructure and mining Deerosh Maharaj says urgent attention and innovative solutions are needed to ensure resilience and growth in the shifting energy landscape.

Higher tariffs erode disposable income, limiting spending power and creating broader economic ripple effects, with the indirect consequences equally concerning, particularly the risk of job losses as businesses struggle to maintain profitability under rising operational costs.

“For businesses, it becomes increasingly difficult to remain competitive. When electricity costs outpace inflation, businesses face a tough choice: absorb these costs, which eats into profits, or pass them on to customers, potentially losing their competitive edge.”

He adds that industries operating with tight margins are especially vulnerable, as are lower-income households.

Renewable energy, for example, offers a compelling alternative to mitigate the financial strain of rising tariffs. Maharaj says solar PV technology has emerged as one of the most viable options for businesses.

However, “while solar PV is an attractive option, the available installation space often falls short of meeting the full energy demands of businesses. Moreover, storage systems, which are essential for ensuring a consistent power supply, remain a costly investment for many,” he explains.

Despite these obstacles, advancements in technology are improving the viability of renewable solutions. Over the past three years, the cost of energy storage has declined significantly, consequently enabling more businesses to explore solar PV systems and other renewable technologies.

Standard Bank has been a leader in facilitating this transition, Maharaj says, adding that the bank has supported large-scale utility projects through its Corporate and Investment Banking division and provided bespoke funding solutions for smaller embedded-generation projects.

Through its Business Solar Loan solutions, the bank has funded over 1 500 solar PV installations, deploying more than R2-billion in financing.

“Our solutions are designed to ensure clients are cash-neutral from the outset”, making the investment case of the project more feasible and minimising financial strain while protecting businesses from risks such as poor-quality systems or illegal grid connections, Maharaj notes.

Further, although loadshedding has eased in recent months, concerns about long-term energy security remain prominent. Maharaj underscores the importance of public–private collaboration in managing South Africa’s just energy transition, a process that involves balancing environmental, economic and social considerations to achieve a sustainable energy mix.

“Effective regulation and streamlined access to the grid will be critical in ensuring stability. This requires a concerted effort from the private and public sectors to align priorities and enable long-term energy resilience.”

He adds that strategic investments in sustainable energy solutions are also valuable, and by adopting a phased approach, businesses can achieve meaningful cost savings while contributing to a more sustainable future.

The first step for businesses embarking on their sustainable energy journey, Maharaj advises, is conducting a detailed energy audit to identify inefficiencies.

Simple measures, such as switching to energy efficient lighting or optimising heating and cooling systems, can deliver significant cost savings, often with payback periods of less than a year.

For larger investments, such as solar PV systems, businesses can expect returns within five to seven years. Advanced energy storage systems, while initially costly, offer benefits such as peak-demand management and enhanced resilience during outages.

Meanwhile, Maharaj says businesses must adopt a forward-thinking approach to energy management.

He advises that companies integrate sustainability into their operations to not only mitigate current challenges but also position themselves for future growth.

“The global market is increasingly sensitive to carbon-intensive products. Businesses that act early to adopt renewable-energy solutions will gain a competitive advantage locally and internationally,” he concludes.