The Sustainability Institute Innovation Lab
iShack Social Enterprise
The iShack Project was established by the Sustainability Institute Innovation Lab in Stellenbosch to demonstrate and refine a model for providing affordable, off-grid solar energy services to unelectrified, low-income households in South Africa. The country's constitution provides for the progressive realisation of services to citizens, meaning that these communities are entitled to free basic electricity due to their ‘indigent’ status. However, they do not receive it because their homes in informal settlements are not connected to the electricity grid. The intention behind this work is to provide the evidence to support the adoption of solar energy in informal settlements, and the updating of national laws and policies to make better provision for large-scale roll-out of this kind of alternative energy service.
The iShack Project provides Solar Home Systems (SHS) consisting of small rooftop solar panels (50-75Wp), batteries and distribution boards, which power lighting (3–4 lights per household),televisions and phone chargers with DC electricity. A wide range of funding and revenue models have been tested over the years. In the largest roll-out – in Stellenbosch - the municipality has provided a monthly operations& maintenance subsidy per household via a public-private partnership contract with the iShack Project, covering up to 90% of the utility’s overhead costs. In other communities, where no grants or subsidies are available, the project allows households to pay off the cost of a SHS over 3 years.
Customers with SHS are able to access clean and safe indoor lighting (to allow them to work and study at night), external lighting (for security), mobile phone charging (to allow them to connect with the world) and television (to access news, entertainment and education). In the absence of electric lighting, they would typically use candles or hydrocarbons (e.g. kerosene lamps) for indoor lighting, which pollutes the air and significantly increases the risk of fires. Each household enters into a contract with the iShack business, and pays a joining fee. To continue accessing the service, they also make affordable and flexible co-payments that are combined with subsidies or grants to provide a durable, ‘utility’-style service for maintenance and ongoing client-services.
Indoor and outdoor air quality is improved by displacing the use of hazardous fuels for lighting. The use of solar technology eliminates the carbon emissions associated with South Africa's coal-dominated electricity grid and the use of hydrocarbon fuels. The risk of runaway shack fires is also reduced, protecting the lives and meagre possessions of the most vulnerable.
Apart from providing an affordable, clean, dignified and durable energy service to over 9,000 residents, the initiative has also been successful in gradually influencing policy changes in South Africa. For example, Stellenbosch Municipality changed its “indigent policy” to enable the use of funds for Free Basic Electricity to also be used to subsidise Solar Home Systems for households that are not connected to the electricity grid.
To date, approximately 3,000 households across 10 different communities have received a SHS in Stellenbosch and Cape Town.
The learnings from multiple trial sites and testing various funding and delivery models shows that it is not possible to achieve universal access to basic, clean energy in poor communities by simply relying on market forces. Subsidies are required from the state to ensure universal access. Upscaling this work requires national and local governments to update their policies and allocate funding to off-grid alternatives such as SHS so that they can meet their statutory service-delivery obligations.
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