The small and medium enterprises (SME) profits substantially from the growth of the South African economy. These further also form a crucial component in the South Africa’s inclusive economy. Based on sources, the SME sector in the region contributes 47% workforce which further contributes to more than 20% of GDP and foster 6% of corporate taxes.
According to a report of the National Development Plan, the SME sector is anticipated to create 90% of new jobs by 2030. Furthermore, the digital revolution will foster operations of SME owners and their funding, thus impacting the structure of their economic landscape until 2030.
South Africa’s ubiquitous power cuts affect the functioning of small businesses negatively, thus leading to reduction of production capacity, and lower turnover, and lesser SME growth rate. As a result of frequent power cuts, SMEs depend greatly upon Eskom for 100% of their energy needs.
Based on a report by Gordon Institute of Business Science (GIBS) Working Papers Showcase on Green Entrepreneurship in South Africa showcase anticipate that the market for energy generation and storage technologies in South Africa will flourish in the coming years.
South African entrepreneurs are using the trend of falling prices for solar to deliver value positions for societal benefit. The contribution of SME in the alternative energy space will further support Sustainable Development Goal (SDG) 7, thus providing universal access to affordable, reliable and sustainable energy.
Furthermore, the development of renewable energy will largely impact SMEs which are facing ongoing tariff hikes and other power related issues. By getting SMEs involved in alternative energy, they could use incentives provided for installation of renewable energy solutions. SMEs can also claim a percentage of the cost of solar and other renewable energy solutions back from SARS, while some financial institutions offer financing for renewable energy solutions.