We sat down with David McDonald, CEO at SolarAfrica, to unpack the key differences between on-site commercial and industrial solar, wheeling and trading – and how companies can build a more flexible, cost-efficient and future-proof energy mix.
David: We usually begin by asking customers what’s driving their decision: savings, sustainability, or reliability? That determines where we start.
For pure savings, on-site solar energy typically delivers the biggest impact per kilowatt hour. You’re offsetting the most expensive power – grid electricity – and avoiding Eskom’s legacy charges, levies and environmental surcharges. In simple terms, generating solar electricity at your own facility means paying less of the extras built into grid tariffs.
But on-site solar only works if you have the space and the load profile to support it. A shopping centre with ample roof space is ideal. A smelter with high round-the-clock demand but little roof area, less so. That’s where electricity wheeling comes in: power generated at a remote solar power supplier or renewable energy plant (often in high-irradiation areas like the Northern Cape) is fed into the grid and credited to your Eskom account. Because projects are built at scale, the price per unit is competitive – although slightly higher than on-site solar once Eskom’s wheeling charges are applied.
Then there’s electricity trading. Here, a licensed power trading company buys power from multiple renewable plants – solar, wind, even hydro – aggregates it, and sells it on to customers. It offers flexibility, especially for companies that can’t commit to long-term contracts, but the trade-off is price, since you’re paying both the IPP and the power trader’s margin.
So if you line them up by price: on-site solar solutions generally provides the greatest savings potential per unit, followed by power wheeling, with trading electricity being the most flexible but also the costliest option. However, you can obtain a higher penetration by wheeling or trading, which means potentially bigger savings through economies of scale and unlocking cheaper energy rates.
David: It depends on your risk appetite and planning horizon.
If your business has a long-term outlook – say 15 years or more – and enough space, solar is a no-brainer. But if you can only commit to a five- or 10-year window, or your site can’t host a large enough system, then wheeling agreements might be the best option to find cheaper electricity.
Trading works for businesses that want renewable energy exposure without signing a 15- or 20-year power purchase agreement (PPA); for example, those who just need a short-term sustainability contract to meet board requirements or investor mandates. It can also serve as a bridge solution while planning or permitting on-site generation or exploring solar financing or solar system loans.
David: Each model has its own cost profile… and its own fine print.
With on-site solar, you want to ensure performance guarantees, maintenance and insurance are built into your PPA price. That’s how we, as SolarAfrica, structure it, so there are no surprise costs down the line for companies seeking cheaper business electricity,
With wheeling, you’ll often see use-of-system charges. That’s essentially Eskom’s line-rental fee, passed through to the customer. It’s small today, but it varies by region and can grow over time, so it’s worth checking how your supplier handles it.
Trading electricity prices are shaped by contract length and mix of resources. A one-year deal might deliver minimal savings, while a five to 10-year deal could yield 10–15% below Eskom rates. Again, you’re paying for flexibility, which usually costs more
David: Batteries are changing the game, both on-site and at utility scale.
For utility-scale wheeling projects, batteries let IPPs change the energy profile they deliver; storing energy during the day and dispatching it in the evening peak. That helps smooth out costs, but customers need to understand how their tariff is structured: are they paying a flat rate or a time-of-use rate that reflects those peak savings?
On-site batteries give even more control. You can shift your load by charging when energy is cheapest and discharge when it’s most expensive or during load shedding. For example, some SolarAfrica clients originally installed batteries purely for backup, then later moved to a time-of-use model to reduce costs once load shedding eased. The result? Greater flexibility, resilience and access to cheaper energy deals.
David: That’s one of the biggest pain points. Even for us, comparing competitor proposals can be tricky – there are just so many moving parts.
But there are a few key things to check, which predominantly relate to wheeling:
Even small contractual differences – like escalation type, deposit structure or credit requirements – can have a big impact on lifetime cost. What initially looks cheaper can end up costing far more if those details aren’t clear.
David: We, as SolarAfrica, sit at the intersection of the solar, wheeling and trading worlds. We’re not just an IPP and we’re not just a rooftop provider. That gives us flexibility to tailor affordable power solutions around each customer’s journey.
It starts with understanding their short and long-term goals. Maybe they need a short, flexible contract now to unlock financing, like one client who needed a green power deal signed by April to secure expansion funding. In that case, we structured a short-term wheeling contract, then planned their on-site project as phase two.
We’ve even helped clients secure the guarantees Eskom requires by partnering with third-party financiers, so they can start saving sooner rather than waiting years to raise capital.
Our philosophy is simple: keep it transparent, flexible and focused on lifetime savings.
The takeaway?
Whether you’re chasing savings, reliability or sustainability credentials, the best energy mix is rarely one-size-fits-all. The key is understanding your options and partnering with an energy provider who can design a solution that evolves with your needs.
At SolarAfrica, our job is to help you decode your options and do the heavy lifting so you can focus on running your business. We maintain that customers shouldn’t have to juggle multiple contracts or decipher fine print, so contact us today to see how we can help you.
