Energy poverty and electricity losses are usually treated as two separate problems. They are not. In many informal settlements, families need energy for four basic purposes every day: cooking, hot water, lighting and communication.
Where safe and affordable electricity is unavailable or inadequate, households turn to paraffin, candles, LPG, open fires or illegal connections. These alternatives are expensive, unsafe and damaging to municipal infrastructure. A household that cannot afford sufficient electricity will find a way to obtain it. The question is whether that way is safe and legal, or dangerous and destructive.
The City of Cape Town should establish an Informal Settlement Energy Access and Loss-Reduction Pilot Programme. The programme should operate in selected communities with high levels of energy poverty where non-technical electricity losses are substantial.
The programme would combine municipal subsidies, household contributions where affordable, community management and local enterprise. It would treat informal settlement energy access as an infrastructure and economic development question rather than a policing problem.
The proven Stellenbosch iShack model should be adapted for Cape Town conditions. Each participating household could receive a basic solar package consisting of a rooftop solar panel, a battery, three or four LED lights and phone-charging points. Provision could be made for a low-power television or similar appliance.
The purpose is not to replace eventual grid electrification. It is to provide a safe basic energy service immediately in settlements where conventional electrification will be delayed or technically difficult. Every light and phone charged by the sun is energy the household does not have to buy elsewhere.
Solar panels, batteries and inverters in informal settlements are vulnerable to theft. Technology selection must reflect this reality. The programme should incorporate secure battery cabinets, tamper monitoring, remote shutdown capability and modular replacement design.
Community ownership can provide an additional layer of protection. An asset that belongs to the community has a different security relationship from an anonymous piece of municipal infrastructure. Local manufacturing of modular components would also reduce replacement costs.
Heating water is an important household energy requirement. Cape Town should test inexpensive non-pressurised solar water-heating systems specifically designed for informal settlements.
Simple batch heaters using properly designed dark-coloured tanks, or other low-cost solar thermal technology, could provide warm water for washing without consuming prepaid electricity. Safety standards and approved designs would be essential.
Where individual systems are impractical, shared solar hot-water facilities could serve groups of households. Community-managed facilities could provide hot water, showers, washing facilities, lighting and phone charging.
Small user charges could contribute towards cleaning, security, maintenance and equipment replacement. The governance structure must be designed carefully: fee collection mechanisms, maintenance arrangements and dispute resolution processes must be specified before construction begins. Community energy officers could manage these facilities.
Solar cookers should be offered as a supplementary rather than primary cooking technology. On suitable days they can reduce the amount of electricity, LPG or paraffin required for slow cooking and water heating.
Local workshops could manufacture and repair approved solar cookers, solar ovens and cooking bags. This would turn an energy programme into a small-enterprise and skills-development programme. The contribution to household energy budgets would be modest but useful.
Organic waste should be regarded as a potential energy resource. Larger community-scale biodigesters could be tested where there is sufficient organic feedstock, trained operators and appropriate safety controls.
Biogas could supplement solar energy, particularly for cooking or water heating when solar resources are insufficient. This element should be treated as a controlled research pilot rather than installed household by household. The failure rate for community biodigesters is high and the resource requirements are substantial.
The most important innovation is the financing model. The Stellenbosch iShack experience demonstrated that a municipality can support an off-grid basic electricity service for qualifying households through an alternative-energy subsidy.
Cape Town should investigate a similar mechanism for households that cannot yet receive conventional electricity. The subsidy could be combined with national grants, climate finance, green funding, private-sector contributions and affordable household co-payments.
A detailed financing model must be developed before the pilot begins. This must specify capital cost per household, operating cost, ownership arrangements, co-payment structure, default risk and maintenance responsibilities. Committed funding sources must be identified rather than listed.
Where technically appropriate, components should be assembled, installed, maintained and repaired locally. Residents could be trained as solar installers, maintenance technicians, community energy officers, solar-water-system manufacturers, electrical assistants, waste and biogas operators and energy-efficiency advisers.
A weighted scoring preference should be applied for South African manufactured components. A cost premium of up to 20 per cent should be deemed acceptable where broader economic development benefits justify it. Every rand spent on imported technology leaves the country. Every rand spent on local technology circulates through local wages and local suppliers.
The programme therefore becomes more than an electricity intervention. It becomes a local economic-development programme.
The City should select several pilot areas and establish a baseline before installation. The baseline must measure illegal connections, transformer failures, meter tampering, estimated unmetered consumption, infrastructure repair costs, electricity outages and household spending on electricity, paraffin, LPG and candles. Fire incidents should also be recorded.
The City must then measure exactly the same indicators after 6, 12 and 24 months of running the pilot. An independent party with no contractual relationship to any vendor should conduct the baseline and the follow-up assessments. This protects the programme’s credibility.
The crucial question is this: can R1 spent on basic alternative energy save the City more than R1 in losses, repairs and enforcement while improving people’s lives? If the answer is yes, the City must expand the programme across Cape Town.
For a household on Cape Town’s Domestic prepaid electricity tariff, a R500 purchase currently provides only around 100 kWh after the monthly service-and-wires charge is recovered.
When sunlight provides much of the household’s lighting, phone charging, water heating and some cooking, the purchased electricity can be concentrated on the things solar cannot conveniently provide. For households qualifying for Lifeline electricity, the benefit could be greater because the City’s Free Basic Electricity allocation can be combined with energy-saving measures.
Any household receiving a solar home system should retain its indigent status and its Free Basic Electricity allocation. Participation in any demand response or load management programme must be opt-in with incentives.
This is a hard constraint. No indigent-registered household should be subject to mandatory dynamic tariff pricing or automated demand response restrictions.
Off-grid electricity provision in informal settlements raises complex legal questions. Does the household remain a municipal electricity customer? How is the subsidy structured? What are the metering and billing arrangements? What are the safety and compliance standards? How does the programme interact with Eskom’s licensing framework?
The City should commission a legal review before the pilot begins. The review should clarify the household’s status as a municipal customer, the subsidy structure, metering arrangements and safety standards. It should propose a regulatory pathway within existing legal frameworks.
Off-grid solar is not a replacement for grid electrification. It is a bridge. The proposal does not treat it as a destination.
The City should explain how off-grid systems transition when the grid arrives. Systems could be relocated, integrated into the grid or retired depending on technical and economic circumstances. The programme must support rather than undermine the long-term goal of universal electrification.
This programme should not stand alone. It should be integrated with the City’s broader energy framework. The grid-edge formalisation workstream, the pressure-reducing valve micro-hydro rollout and the water demand response programme are all relevant.
A household receiving a solar home system is also a potential participant in a Virtual Power Plant. A community with a solar hot-water facility is also a potential site for community battery storage. The programme should connect to these larger initiatives rather than operating in isolation.
The City’s revenue depends partly on electricity sales. If households consume less purchased electricity, revenue falls. This tension must be addressed honestly.
Savings from reduced losses, repairs and enforcement should be ringfenced to fund the programme. An Affordable Electricity Fund or equivalent would provide the transparency required. Savings should be translated into affordability measures rather than disappearing into general revenue.
This is not about giving people gadgets. It is about creating an energy ladder. Energy poverty leads to basic solar energy. Basic solar energy leads to safe community energy. Safe community energy reduces illegal connections. Reduced illegal connections enable formal electrification. Formal electrification enables household economic development.
Cape Town should not regard informal-settlement energy consumption simply as a policing problem. Energy poverty is also an infrastructure, social-development and economic-development challenge.
The City should establish a properly measured pilot and publish the results. Self-reported results are not sufficient. Independent evaluation is required.
If subsidising safe energy access costs less than continuously paying for electricity losses, damaged transformers, illegal connections, enforcement and emergency repairs, then the programme will not merely be socially beneficial. It would be economically worthwhile also.
It could make financial sense for the City. The benefit would accrue to everyone in Cape Town. The pilot should determine whether the promise can be kept. The results should be published transparently. If the hypothesis holds, the programme should be expanded across the City.
The Service Delivery Party requests that the City formally consider the following commitments for inclusion in the Integrated Development Plan.
“Subsidise the solution, not the loss.”
