13/09/2025
Power Security for Factories: From Capacity Letters to Onsite Solar
In South Africa’s industrial sector, power is no longer just a utility. It’s a strategic asset. With load-shedding now a daily reality and grid constraints tightening across Gauteng, energy resilience has become a decisive factor in leasing decisions, capital expenditure planning, and operational continuity.
Whether you’re a tenant evaluating a new site, a landlord upgrading your asset, or an investor assessing long-term viability, understanding power availability and generation options is essential. This guide explores the fundamentals from capacity letters and supply jurisdictions to rooftop solar and hybrid systems so you can make informed, future-proof decisions.
Keywords: power security South Africa, factory energy resilience, Eskom capacity letter, rooftop solar for industry, PPA South AfricaNeed Factory or Warehouse space in Greater Johannesburg?Contact Tinus de Beer: 079 761 2104, mandated.co.za/
Why Power Security Is Now a Leasing Priority
According to the CSIR, 2022 was South Africa’s worst year on record for load-shedding. More than 80% of outages occurred in the second half of the year. Eskom’s Energy Availability Factor (EAF) dropped to 58.1%, down from 65% in 2020, underscoring the grid’s declining reliability.
For industrial tenants, this leads to production delays, equipment damage, and rising energy costs. Landlords face increasing pressure to provide backup solutions and embedded generation. For investors, energy resilience is now a key metric in asset performance and tenant retention.
Power Availability Checks: What Tenants Must Know
Before signing a lease, tenants must confirm whether the site can support their operational load. This involves three essential steps.
Capacity Letters
A capacity letter is a formal document issued by Eskom or City Power confirming the maximum available kVA at a site. It’s required for new connections, upgrades, or embedded generation applications. Eskom’s Grid Capacity Allocation Rules follow a “first-come, first-served” approach, making early engagement critical.
City Power vs Eskom Supply Areas
City Power supplies most of Johannesburg, while Eskom covers outlying industrial zones. Tenants can verify supply jurisdiction using the City of Johannesburg’s application portal. Large Power Users (above 56 kVA) must submit detailed load profiles and transformer specifications when applying for new connections.
System Status Reports
Eskom publishes weekly and medium-term system adequacy reports that forecast grid constraints. These are especially useful for assessing risk in high-demand corridors such as the West Rand and Ekurhuleni.
Rooftop Solar and PPA Options
As grid reliability continues to decline, many factories are turning to embedded generation. Three models dominate the market.
Rooftop Solar PV (Capex Model)
In this model, the tenant or landlord owns the solar system. It requires upfront investment, engineering sign-off, and registration with Eskom or City Power. Recent SABS regulations may allow qualified electricians to issue Certificates of Compliance (CoC), reducing registration costs from R20,000-00 to approximately R1,500-00. This option suits long-term tenants or owner-occupiers seeking full control over their energy infrastructure.
Power Purchase Agreements (PPAs)
PPAs allow a third party to own and operate the solar system. Tenants pay for electricity at a fixed rate, often lower than Eskom tariffs. There’s no upfront cost, and the agreement typically includes maintenance, insurance, and performance guarantees. Harmony Gold’s 500 MW rollout is a prime example, delivering R425 million in annual savings across multiple sites.
Hybrid Systems
Hybrid setups combine solar PV, battery storage, and diesel or gas backup. These systems can reduce fuel costs by up to 15% and improve uptime from 85% to 98%. They’re ideal for high-load operations with mission-critical equipment that cannot afford downtime.
Expert Insights
Industry leaders agree: energy resilience is no longer a luxury.
Aggreko Africa notes, “Hybrid systems offer resilience and cost control in volatile energy markets.”
SolarAfrica adds, “PPAs remove the hassle of ownership while delivering clean energy from day one.”
OUTA advocates for reform, stating, “Eskom’s registration process must be fair and lawful. CoCs should suffice for small-scale systems.”
Pre-Lease Power Checklist
Before committing to a lease, tenants should:
Request a capacity letter from Eskom or City Power
Confirm supply jurisdiction and transformer specifications
Review historical load data and peak demand
Check for existing embedded generation or solar infrastructure
Assess roof condition and orientation for PV feasibility
Clarify metering type (bulk, sub-metered, prepaid)
Ask about backup systems (generators, batteries)
Review municipal tariffs and peak-hour surcharges
Confirm the registration status of any solar PV system
Include power availability clauses in lease negotiations
Case Studies
Real-world examples show how energy strategy drives value:
Harmony Gold saved R340 million over 15 years with a 30 MW solar rollout across three sites
Cape Town SMEs benefited from reduced solar registration costs under new CoC rules
Johannesburg tenants used capacity letters to negotiate lease terms and avoid costly upgrades
How to Use This Insight
Tenants should ask brokers about power specifications, backup systems, and embedded generation. Visiting sites to assess infrastructure and risk is essential.
Landlords can attract quality tenants by investing in solar, hybrid systems, and transparent metering.
Investors should prioritise assets with energy resilience, especially in high-demand corridors. Partnering with solar providers and staying informed on regulatory developments will strengthen long-term returns.
Explore listings and energy solutions via Eskom, City Power, SolarAfrica, Aggreko, and OUTA to take the next step.
Conclusion: Secure Your Power, Secure Your Business
Power security is now central to leasing and capex strategy. Whether you’re scaling up, relocating, or investing, energy resilience should be a core part of your decision-making process.
Use the checklist and case studies to guide your next move. Before signing your next lease, ask yourself: Can this site power your future?