South Africa is experiencing unprecedented demand for affordable housing, driven by rapid urbanisation and the rise of multi-family rental developments.
The multi-family rental sector has been growing rapidly in response, reflecting both the demand for urban housing and the financial viability of rental-driven developments. However, in many parts of the country, particularly in dysfunctional municipalities, the inability to secure reliable electricity connections is stalling that growth.
The South African Multifamily Residential Rental Association (SAMRRA) represents 13 institutional investors who collectively own more than 75,000 apartments worth R40 billion. The association represents privately owned residential stock designed specifically for renting rather than for sale.
These properties are typically owned by institutional investors and managed by specialist operators. This sector is an increasingly critical component of South Africa’s urban housing landscape, catering to the growing demand for affordable, well-managed rental accommodation.
Keanu Naidoo, Decentral’s lead pre-sales engineer, says
“We have designed and built eight grid-tied or off-grid energy solutions for complexes managed or owned by members of SAMRRA, with a further five in progress. These provide both cost savings and energy security to over 2 000 households and show that lower income families can also benefit from the shift to behind-the-meter energy solutions”.
Even in more functional municipalities, developers are increasingly facing delays and obstacles when trying to obtain grid connections for new housing projects. This is especially the case in traditional townships or on the urban fringe where the grid is often already overburdened, but where lower land prices make affordable housing development possible.
This energy crisis is not just a short-term inconvenience—it is fundamentally hindering fixed capital investment in much-needed housing infrastructure and exacerbating urban overcrowding.
Without available power supply, affordable housing projects cannot be occupied, limiting housing availability and impacting economic growth.
In response to these constraints, many developers have explored the potential of renewable energy, particularly solar photovoltaic (PV) systems paired with battery energy storage solutions (BESS).
Solar PV is an attractive option for long-term energy sustainability, reducing reliance on South Africa’s struggling grid, cost predictability and mitigating exposure to load shedding. However, the primary drawback of this approach is the upfront cost.
For large-scale housing developments, the capital expenditure required for a fully off-grid solar and battery system can be prohibitively high. Battery storage remains expensive, particularly for systems designed to handle nighttime energy demand or prolonged cloudy conditions. While these solutions are ideal for year-round applications with stable energy demand, they present significant financial hurdles that can delay or deter development.
Decentral Energy offers Power Purchase Agreement (PPA) and rent-to-own solutions, enabling developers to implement solar and battery storage without the prohibitive upfront costs. By structuring energy solutions through these financial models, developers can secure clean, reliable power while avoiding large capital outlays.
Decentral Energy has also partnered with Blockpower to optimise load management in rental complexes, leveraging distributed hot water geysers as additional energy storage capacity.
This “load shifting” strategy intelligently manages energy consumption, aligning demand with the solar peak and improving overall system efficiency.
A cost-effective alternative is the use of LPG-powered gas engine generators.
Liquefied petroleum gas (LPG) is widely available in South Africa and offers a cleaner, quieter and more efficient alternative to diesel generators. Gas engine generators can provide stable, reliable electricity to housing developments while bypassing the need for municipal grid connections.
Guascor gas engines, for example, offer an efficient and scalable solution, ranging from 220kVA to 2MVA. These engines can be deployed to power entire housing complexes, supporting critical infrastructure such as lighting, security systems, and water pumps. Furthermore, they can be integrated with solar PV to optimise fuel efficiency—using solar power during the day and gas generation as a backup or nighttime source.
The key benefits of LPG-powered gas engine generators include:
To unlock the potential of South Africa’s affordable rental housing market, developers need reliable and cost-effective energy solutions. While solar PV and battery storage remain the ultimate long-term solution, the current financial and technological constraints make them challenging for many projects.
LPG-powered gas engine generators provide a practical interim solution, ensuring that housing developments can proceed without being delayed by dysfunctional municipalities and unreliable electricity connections.
By embracing hybrid energy solutions—combining LPG-powered generators with solar PV—developers can create resilient housing communities, free from the constraints of Eskom and municipal inefficiencies. This approach not only facilitates project viability but also ensures a sustainable transition to a cleaner and more reliable energy future.
