Solar wheeling in South Africa: how it works and what it means for utility-scale IPPs

Solar wheeling in South Africa lets an independent power producer (IPP) sell electricity from a utility-scale solar plant to a buyer at another site, using Eskom or municipal networks instead of a private line. The buyer receives credits for the wheeled energy by time-of-use (TOU) period, and both parties pay network charges.

Demand for private renewable power in South Africa is strong on both sides of the deal. Commercial and industrial (C&I) buyers want relief from rising tariffs, and IPPs are “ready to build.”

Wheeling can let an IPP sell electricity to a customer at another location without building a dedicated line between the sites. The project still depends on available network capacity, connection requirements, applicable charges, and the arrangements of the relevant network operators. This model uses the existing grid to transmit solar electricity between separately located generators and customers, so IPPs can sign corporate power purchase agreements (PPAs) without building a dedicated power line to the buyer’s site.

Trader-led models are playing a growing role in South Africa’s private renewable-energy market. In February 2026, Discovery Green’s CEO estimated that traders had channeled about 80% of newly closed private renewable generation in the preceding year; this is an industry estimate, not a measure of all C&I procurement.

But to get projects connected and operating, IPPs need to work within limited transmission capacity (a constraint we covered in our look at South Africa’s solar power surge) and underdeveloped, often inconsistent wheeling frameworks at the municipal level.

Solar wheeling 101: how does it work?

Solar wheeling is the process of generating solar power in one location and transmitting it through an existing utility grid to be consumed at a different, off-site location. For buyers, wheeling removes the need for on-site space. For IPPs, it opens up a far larger market. Eskom’s own example is a solar farm in the Northern Cape selling to a corporate buyer in Gauteng.

Both the solar generator and the customer pay applicable charges for using the grid to wheel electricity. The exact charges depend on their connection and tariff arrangements.

What are the benefits of solar wheeling for IPPs?

Wheeling lets IPPs build utility-scale solar where irradiance is high and land costs are low, then sell that power to buyers elsewhere through the existing grid. Projects are no longer limited to sites close to the off-taker.

Buyers are already signing deals. Vodacom South Africa buys solar power from SOLA Group’s plant in Virginia, Free State, through Eskom’s virtual wheeling mechanism. Vodacom says its virtual-wheeling arrangement with SOLA Group became commercially operational in September 2025. It supports renewable-energy procurement for approximately 15,000 low-voltage sites across 168 municipalities, using power from SOLA’s Virginia solar plant.

In May 2026, Tiger Brands signed a wheeling agreement with Apollo Africa. From 2028, its Gauteng sites supplied through Ekurhuleni are expected to get about 60% of their electricity through wheeling.

Increasingly, IPPs reach those buyers through intermediaries. In the year to early 2026, around 80% of newly closed private renewable generation was channeled through licensed traders rather than direct bilateral contracts.

Should you wheel through Eskom or a municipality?

For an IPP, the first step is to establish where the plant will connect and where each off-taker takes power. These two points decide whether you work through Eskom, a municipality, or both.

South Africa has national rules for network charges on third-party wheeling, but implementation is not yet standardized across municipal networks. GreenCape’s 2026 market intelligence report says that, out of 257 municipalities, six had wheeling frameworks in development or implementation: Amahlathi, City of Cape Town, George, Greater Tzaneen, Nelson Mandela Bay, and Swartland.

The six-municipality list is not a complete register of every project or arrangement. Tiger Brands has announced a deal involving sites supplied through Ekurhuleni, so confirm the applicable process and agreements directly with each municipality involved.

Your route will have commercial and operational consequences because Eskom and municipal networks handle wheeling differently:

How do financial risks differ by route?

 If you wheel through Eskom, the off-taker is your commercial counterparty. Eskom is not a party to the PPA between the buyer and seller, and it does not provide deemed-energy payments to the generator for network or system unavailability. Review the current supply and wheeling agreements for the consequences of late payment; Eskom’s July 2026 wheeling policy does not specify that unpaid bills automatically result in wheeling credits being withheld. Assess the buyer’s creditworthiness carefully before signing the PPA.

A municipal network brings its own financial risks. Because municipalities often depend on electricity sales for revenue, some apply surplus-neutral wheeling tariffs, which are designed so the municipality neither gains nor loses revenue when a customer buys wheeled power. Depending on how they are set, these tariffs may reduce the savings your PPA promises the buyer.

The municipality’s financial position can also affect the arrangement itself. Municipal arrears remain a due-diligence concern. In March 2026, Eskom said it was beginning a legal consultation process involving around 14 municipalities. By its subsequent update, Eskom reported national municipal debt of R111.6 billion and said it had issued final notices to three municipalities. Check the latest position and the municipality’s payment and network arrangements before committing to a project.

Before you commit, check whether the target municipality is in good standing with Eskom.

How are wheeling credits calculated?

How the customer receives the credit depends on the billing model.

Traditional wheeling: The customer continues to receive a bill for its metered consumption, with a separate wheeling credit applied through the Eskom billing process. Under the current process, energy is reconciled by the TOU period on a monthly basis. Eskom has approved a move to hourly TOU reconciliation for existing and new contracts once its automated system is tested and implemented; it has not yet announced the implementation date.

 Virtual wheeling: The customer continues paying its Eskom or municipal bill. A claimant acting for one or more customers submits a monthly claim to Eskom; the refund is calculated using the lower of consumed energy or wheeled energy in each TOU period. The mechanism can include qualifying municipal-connected sites, subject to Eskom’s business rules and metering requirements.

Include the 2026/27 tariff structure in your financial model. Eskom says the GCC rate for applicable tariffs increased to 30% of the originally proposed FY2025 Retail Tariff Plan rand value, from 20%, with energy rates adjusted to offset the change. 

Separately, the Gen-wheeling credit excludes losses and the portion of the GCC included in TOU energy rates. Model the applicable tariff and wheeling credit for the specific customer rather than assuming the credit offsets the full standard energy charge. 

How can BESS improve wheeling economics?

South Africa’s IRP 2025 envisages 8.5 GW of storage by 2039. In October 2026, the government confirmed a proposed 4,600 MW BESS allocation under its first Section 34 determination; procurement and implementation details remain subject to the subsequent process.

Hybrid plants are already operating at utility scale. TotalEnergies’ Hydra project near De Aar pairs 216 MW of photovoltaic (PV) capacity with a 500 MWh battery, which TotalEnergies describes as the largest hybrid renewable project in Africa. It supplies Eskom under a 20-year power purchase agreement, so it is a utility-scale hybrid reference rather than a wheeling case study. Its configuration may inform design discussions, but it does not establish the economics of a corporate wheeling project. 

Hydra combines a 216 MW solar PV plant with a 500 MWh battery and supplies electricity to Eskom under a long-term PPA. It is a utility-scale hybrid project, not a wheeling case study, so its configuration may be relevant to design discussions but does not establish the economics of a corporate wheeling project.

Sizing that storage is a design decision as much as a commercial one. In RatedPower, you can compare AC- and DC-coupled configurations and review estimated production and cost differences before selecting a design for further development. For a wider view of the region, see our overview of battery storage in Africa.

Dedicated BESS procurement and expanding financing channels are giving developers more reason to integrate storage. For wheeling projects, storage can add value in three ways:

• 1.Match generation to customer demand

A battery can shift some solar output to later periods, subject to its power and energy limits, round-trip losses, charging arrangements, and dispatch constraints. Model the customer’s demand, the applicable TOU periods, and wheeling rules to assess whether shifting energy could improve the project’s fit with the load or the value of credited exports.

Where export constraints vary over time, storage may be able to absorb some generation that would otherwise be curtailed and export it later, if the network can accept the discharge at that time. It will not resolve every network constraint, so assess the connection limit, likely curtailment profile and permitted operating strategy before sizing the battery.

• 2. Time-of-use value 

Eskom calculates wheeling credits across Peak, Standard, and Off-Peak periods, so the timing of your project’s exports affects the value of the credit. Energy is also credited in the same TOU period it was generated, so a kWh exported in a standard period can’t offset consumption in a peak period. Storage gives you some control over that timing: you can hold generation from a lower-value period and export it during a higher-value one.

• 3. Avoid curtailment

Are you developing a project in a grid-constrained area? Where export constraints vary over time, storage may be able to absorb some generation that would otherwise be curtailed and export it later, if the network can accept the discharge at that time. It will not resolve every network constraint, so assess the connection limit, likely curtailment profile, and permitted operating strategy before sizing the battery. Treating curtailment as a design constraint from the start helps with that assessment.

Which agreements does a solar + BESS wheeling project need?

 Adding BESS to a wheeling project brings extra contractual requirements:

●      PPA: Your PPA may need to explain how the battery affects pricing and who covers storage losses. It should also make clear who controls dispatch, especially if the battery could be used to improve wheeling economics or better match the customer’s demand.

●      Grid-access agreements: On the generator side, you need a Connection and Use of System Agreement with Eskom, together with the applicable generator use-of-system arrangements. Your off-taker must have an Electricity Supply Agreement with Eskom and sign a Gen-Wheeling amendment before wheeling can begin.

●      Wheeling agreement: Eskom asks both the generator and load customer for a three-year forecast of wheeled energy before the wheeling agreement is approved and becomes effective. If you supply multiple off-takers, you also need to specify how the exported energy will be split between them. 

Frequently asked questions

 What is solar wheeling in South Africa?

It’s an arrangement where an independent power producer (IPP) sells power from a solar plant to a buyer at a different site through Eskom or municipal networks. The buyer receives credits for the wheeled energy, and both parties pay network charges.

What is the difference between traditional and virtual wheeling?

Traditional wheeling credits the wheeled energy on the buyer’s Eskom account. Virtual wheeling lets an entity claim refunds from Eskom for wheeled energy across many sites, including municipal-connected ones, while the sites keep paying their normal bills.

Do wheeling credits cover the full Eskom energy charge?

Not necessarily. Eskom’s 2026/27 Gen-wheeling schedule excludes losses and the portion of the GCC included in TOU energy rates when calculating the credit. The applicable result depends on the customer’s tariff and wheeling arrangement.

What happens if wheeled volumes differ from the forecast?

Eskom requires a three-year forecast and expects actual volumes within ±5%. Penalties for missing that range are not yet in effect and will apply only once the National Energy Regulator of South Africa (NERSA) approves them.

What forecast does Eskom require before wheeling starts?

Both the generator and the load customer must submit a three-year forecast of wheeled energy before Eskom approves the wheeling agreement.

Regulatory note: this article reflects Eskom’s Wheeling of energy and net-billing policy (Revision 2, July 2026). Check for later revisions before relying on specific terms.

Turn wheeling opportunities into viable projects

Wheeling can open new routes to market for utility-scale solar in South Africa, but only if the project works technically and financially. RatedPower supports the design of PV, standalone BESS, and hybrid plants, with modeled energy-yield estimates and CAPEX and LCOE outputs based on the project assumptions entered. These outputs can inform early PPA and wheeling discussions; project-specific wheeling credits, network charges and contractual terms should be assessed using the applicable tariffs and agreements. If you would like to learn more, book a demo.