Embedded Generation: The True Path to Energy Freedom

For South African enterprises seeking liberation from a failing, centralized grid, embedded generation offers superior savings, true resilience, and immediate action compared to the delayed promises of wheeling. While corporate marketers push remote power as the ultimate solution, on-site solar and battery storage remain the most direct path to economic sovereignty for our businesses.

Why is embedded generation the foundation of energy independence?

Commercial and industrial energy users who want secure, clean, and affordable power must look behind the meter. Embedded generation, which consists of solar PV and battery storage installed directly on-site, provides the strongest foundation for true energy autonomy. Lately, a dangerous misconception has taken hold. Wheeling, the process of buying electricity from a remote renewable plant via the national grid, is increasingly pitched to users as the ultimate route to lower costs and decarbonisation.

It is a valuable part of the energy mix, but presenting it as the first move has created real uncertainty. On almost every important measure, embedded is the superior product, so it must come first. Wheeling works best as an addition to embedded generation, not a substitute for it. We must build the foundation behind the meter, maximize those savings, and then layer in wheeled power only where the numbers make commercial sense.

How does the financial reality of retail versus wholesale dictate our choices?

The most important factor in any electricity strategy is the tariff you already pay. With embedded generation, every kilowatt-hour (kWh) produced replaces electricity bought at the full Eskom or municipal time-of-use tariff. This is the highest rate on an electricity bill, and it continues to rise above inflation.

Wheeling operates on a different principle. The credit on an electricity bill for wheeled energy is the Eskom Wholesale Energy Purchase Structure (WEPS), a rate that is materially lower than retail costs. For every unit generated, an embedded system delivers higher savings than a wheeled project. Documented figures show that embedded solar could save around R1.50 per kWh against roughly R0.72 for wheeling. Relying on wheeling first means leaving significant financial resources on the table, resources that could be reinvested into our own economy.

Can wheeling protect businesses from grid instability?

Embedded generation does more than cut immediate costs. With a battery system installed, it reduces peak demand, lowering what is drawn from the grid when usage is highest. Staying under your nominated maximum demand can save a great deal. The same battery can also arbitrage the time-of-use tariff, charging cheaply during off-peak periods and discharging during expensive peak windows.

Wheeling cannot reduce these charges because it does not change a site's grid demand profile. Wheeled power remains entirely dependent on the grid, so when the grid goes down, supply is interrupted. A battery system acts as a power buffer, providing essential backup during load shedding while filtering the harmful voltage fluctuations and harmonics that now frequently plague our local grid. Insulating the site from grid instability protects a business against downtime and equipment damage.

Furthermore, embedded generation functions at the point of consumption. This eliminates the 5-10% physical line losses inherent in wheeled energy and ensures that every electron produced is utilized on-site.

Why the timing of energy solutions matters for economic survival

Timing matters profoundly. Embedded systems can be designed, permitted, and commissioned within a few months, cutting bills immediately. Many wheeling projects currently being marketed are still in the construction or funding phase, with commercial operation dates set for late 2026 or beyond. Our businesses cannot afford to wait for distant promises while suffering under the current system today.

Wheeling is an excellent way to increase renewable penetration once a site is optimized. Before signing a wheeling power purchase agreement, the foundation should be built at home and behind-the-meter savings maximized first. Then, if the numbers still make commercial sense, wheeling can be layered in to take the next step in a sustainability journey. We must start with the solution that offers the best return, the most resilience, and the fastest path to energy independence.

Paul Mansour, Chief Executive Officer at Sustainable Power Solutions (SPS), provides the analytical framework for this strategic sequencing.