One of the main reasons for this growing interest in Wheeling – which allows IPPs, such as SolarAfrica, to generate power and sell it directly to businesses – is that it eliminates the need for on-site solar installations. Yet with an increasing number of Wheeling proposals landing on business owners’ desks, it can be difficult to know what to look for in an energy partner. And while price may be the deciding factor for many, it should not be the only consideration.
Here are 4 important questions you should ask before signing your business with an IPP.
The biggest motivation for businesses to explore Wheeling is cost reduction, but not all pricing models offer the same level of certainty.
Make sure to read your contract carefully to check for hidden price increases, so you can be sure of the long-term savings to expect. At SolarAfrica, we are transparent about costs, guaranteeing that the price agreed upon stays the same from signing to the first day of power delivery.
Beyond the contract, consider how project timelines impact pricing. An IPP’s proposed rate is tied to where they are in the development process. If construction is delayed, rising interest rates, labour costs and import taxes on items such as solar panels could push up tariffs.
The vital safeguard is the Commercial Operation Date (COD) – the moment the plant starts generating power. If the COD isn’t firm, or if delays aren’t addressed in the contract, businesses could face unforeseen costs. A well-structured agreement should ensure the IPP is accountable, with clear provisions on what happens if the COD is missed.
Wheeling isn’t a simple, quick setup – an IPP must clear multiple regulatory and development milestones before delivering power. Recent changes in grid allocation now prioritise projects that are fully prepared rather than those that applied first. If construction hasn’t begun, the project could still be years away from delivering power.
This means only projects such as our SunCentral flagship utility-scale solar farm, which have secured approvals and demonstrated progress, will be allowed to access the grid.
Another indicator of readiness is how far the IPP is in securing off-takers – businesses that will buy the power. This is critical for reaching financial close, as both Eskom and investors require proof of demand before a project moves forward.
Our customers can have peace of mind in knowing that SunCentral recently reached financial close on the first 114 MW of the project’s total 1 GW capacity, securing R1.8 billion in investment.
Ask what percentage of your IPP’s total energy supply at their plant is allocated to you. If an IPP has only signed off-takers for a small portion of its total capacity, it likely hasn’t reached financial close, and further delays could follow.
Energy needs change over time, and an IPP should offer the flexibility to adapt. Some solar farms operate on a one-to-one model, supplying all their power to a single business. Others, like ours, take a one-to-many approach, distributing energy to multiple businesses under different contract terms.
Ask whether your IPP will allow you to scale up energy supply as your company grows, adjust agreements if your needs change, or sell unused power to other businesses to avoid unnecessary costs.
Another important question is whether an IPP can actually deliver more power if a business needs it. A solar-only IPP has natural limitations – solar generation is restricted to daylight hours and peak tariff periods. This is where integration with an energy trader becomes valuable.
We partner with accredited energy traders, such as POWERX – SA’s first NERSA-licensed energy trader – and is currently building a trading business that will allow our clients to supplement solar with other sources like wind and hydro.
Contract flexibility is also critical. Many IPPs offer only long-term Virtual Power Purchase Agreements (VPPAs) – typically 10, 15 or 20 years – because their financial models depend on long-term agreements. Our business, however, also offers shorter contracts of five years or less, as we understand our clients’ need for flexibility.
Wheeling isn’t just about building a solar plant – it’s about ensuring the energy gets delivered reliably, efficiently and with minimal hassle for businesses. That requires an IPP with expertise in engineering, compliance, legal processes and operational management, such as SolarAfrica. Running a Wheeling project requires ongoing infrastructure management, performance guarantees and a clear system for tracking energy credits to reduce Eskom bills and verify green energy usage.
An essential step in the process is securing environmental authorisation, which is required before Eskom grants approval for a generation plant. Without it, projects can face long delays or even cancellation.
Beyond approvals, you should assess whether an IPP is investing in infrastructure to ensure stable energy delivery. If the grid fails, what safeguards are in place? To this end, we are in the process of installing a Main Transmission Substation (MTS) to secure reliable grid access.
Another critical factor is software and system integration. Wheeling requires tracking, billing and credit allocation – does the IPP provide the necessary tools, or will businesses need to appoint an internal team just to manage administration? A good IPP should make Wheeling easier, not create more work.
Finally, consider contract flexibility. Some IPPs focus solely on mega-users, while others, like us, cater to businesses with multiple facilities, allowing us to spread risk across different sites under one agreement. An IPP should be able to adjust energy distribution based on usage needs without creating additional complexity for your business.
With our strong track record, transparent pricing, and the flexibility to accommodate evolving energy demands, you can be assured that you’re well on your way to a smooth shift to wheeled power.
