AHREN POSTHUMUS
As the 2024 national elections begin to inch closer, day by day, South Africans are being confronted with a number of hard facts.
Our national government has failed to deliver basic services (repeatedly), crime is on the rise and our society appears to be growing more unequal year on year. Extreme poverty and unemployment continue to characterise the lives of the majority, and while the private sector does its best to keep the gears of our economy turning, we are all being called to reconsider our approach to several, uniquely South African, problems.
A good starting point for these deeply difficult conversations might be found in our national energy crisis – and the wave of corruption that brought us to this point. These are unique crises because they are underpinned by years of state capture and mismanagement. Sadly, this duplicity has been met with a culture of impunity – leaving most South Africans with little recourse to achieve any sense of justice. The only power we appear to have is at the ballot box next year.
Blockchain technology roots out corruption
While this certainly rings true for most people in our country today, there are a number of technical solutions we can leverage to address the unique issues our country is facing at present. Blockchain technology could play a pivotal role in this undertaking – as a decentralised, incorruptible, immutable ledger that can be used to safely record transactions and build trust. In fact, decentralised technologies aim to eliminate the need for trust all together.
In other words, the technology operates as expected, in accordance to code, with no room for abuse of trust. Not even the most tech-savvy tenderpreneur could defraud a truly decentralised blockchain. This is something all South Africans should know – the technology exists to prevent the deepening of corruption in our country, overnight.
That being said, no one expects our national government to move all its systems and processes on to the blockchain overnight – this would come in direct conflict with those who make these decisions, and who may be the largest perpetrators of corruption in our country.
But that doesn’t mean we can’t use blockchain technology to fix some of the things that corruption has broken – especially when it comes to the supply and generation of electricity for our people, businesses and community centres today.
At present, solar energy is the largest growing alternative energy source in our country. And blockchain technology can help us make it accessible to all.
Democratising our collective access to renewable energy
Given the astronomical set-up fees and costs associated with solar installations, it is no surprise that the majority of installations are happening in wealthier households and at businesses or companies with deeper pockets than most. These stakeholders are fortunate enough to be able to afford the large upfront payments required to make a solar installation a reality.
While we must welcome the move to renewable energy by those who can afford it, we must not forget the debilitating impact that these power disruptions continue to have within the households and businesses of middle-to-low income South Africans.
Government initiatives have proven largely inadequate in addressing this immense challenge for the majority of our country. There have been a few, minor forms of assistance offered in this regard, including the option to take out a loan for solar. This initiative requires that the same middle-to-low income households pay a monthly repayment for their solar installation, subject to their yearly income.
Another option might be to opt into receiving a Section 12B tax break for a portion of your installation costs, although that still does not address any initial affordability issues. The Section 12B allocation also doesn’t help those who don’t earn enough to qualify for income tax in the first place.
This leaves citizens with little-to-no options when it comes to our collective transition to solar energy. Those who run bigger businesses, and individuals with a higher disposable income, will buy their solar, become more resilient and receive their tax benefit. But who is looking after the community centres and the average South African who doesn't have a large rooftop, or millions of rand to spend on solar?
Enter blockchain technology, the incorruptible mechanism that can be leveraged to address the deep divisions characterised by financial inequality in our country.
Tokenize solar assets to crowdfund installations in communities
Blockchain technology can make solar power more accessible by securitising individual solar cells, on a larger solar panel. By fractionalising the panel, South Africans are then able to own or purchase a single cell at a time. This makes them far more affordable to the majority, and allows communities the opportunity to collectively crowdfund the installation of solar panels on community rooftops. This effectively democratises our collective access to renewable, solar energy, overnight.
By making solar assets more affordable, we can encourage business owners to invest in them. An increase in profitable and successful businesses will then have a knock-on effect of creating more jobs and fostering further economic growth in middle-to-low income communities.
The same methodology can be applied to help retailers or spaza shops optimise the management of their stores to improve food quality during long bouts of load shedding. By leveraging the application of blockchain technology to crowdfund solar installations, even retailers in the informal economy can ensure that their customers have access to frozen and fresh food options of the highest standard.
While operational efficiencies are certainly something to get excited about, nothing beats the fact that electricity keeps the gears of our economy turning. We must not forget that we protect jobs and livelihoods every time we succeed in keeping the lights on.
Looking ahead: next steps
Globaldata reports that solar usage accounted for 9% of our nation's overall installed power generation capacity in 2023. This is in stark contrast to a meagre 2% just 2 years prior in 2021. Projections indicate a steep trajectory as installed capacity is anticipated to rise. It is forecast that by 2035, solar power will encompass 21% of the total installed generation capacity in South Africa, signifying a substantial growth in its footprint and impact within our country's energy mix.
Solar is here to stay. Public and private stakeholders must work together to ensure that we use every tool at our disposal to improve its accessibility. One thing is certain – blockchain technology can play a leading role in addressing the levels of inequality that continue to permeate our society by creating solutions that serve all sectors and income levels. Blockchain technology can, and will, contribute to the growth of a more equitable and prosperous South Africa.
Ahren Posthumus is the chief executive at Momint.
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