As energy security concerns and rising electricity costs drive businesses across South
Africa toward alternative energy sources, particularly solar PV, two solar PV
implementation models have emerged as dominant pathways: wheeling and behind-the-
meter (BTM) installations. Both offer distinct advantages, but each carries unique
technical, commercial, and regulatory considerations. At Hammer & Anvil Energy, we
specialise in helping clients understand and navigate these complexities to make informed,
bankable decisions.
Understanding the Basics
What is Wheeling?
Wheeling is the process of generating electricity in one location and transmitting it via the
national or municipal grid to a consumer in another. This allows Independent Power
Producers (IPPs) or private generators to sell power to off-takers who are not co-located
with the generation asset. The state utility (Eskom) or a local municipal grid serves as the
“carrier,” enabling long-distance delivery without requiring private transmission
infrastructure.
Wheeling typically involves three entities:
– The generator (power producer),
– The off-taker (end consumer), and
– The wheeling agent (Eskom or municipality).
What is Behind-the-Meter?
Behind-the-meter installations refer to systems where the electricity generated is
consumed directly at the site of generation. For example, a manufacturing plant installs
rooftop or ground-mounted solar panels and uses the energy to power its own operations.
These systems do not send power onto the grid under normal operating conditions,
although they are capable of doing so.
BTM projects are often paired with energy storage systems (like batteries) or backup
generators for increased reliability and can be configured for grid-tied or islanded (off-grid)
operation.
Similarities Between Wheeling and BTM Systems
At a high level, both models rely on similar solar PV technologies—photovoltaic modules,
inverters, cabling, and switchgear—and follow similar engineering, procurement, and
construction (EPC) workflows.
In both cases, projects require:
– Feasibility assessments and yield simulations,
– Compliance with South African Grid Code regulations,
– Environmental approvals (where applicable),
– Technical due diligence for bankability and insurability.
From a financial standpoint, both models can be deployed through:
– Self-funded (capex) models,
– Power Purchase Agreements (PPAs),
– Leasing arrangements,
– Hybrid structures (e.g., SPVs or Energy Services Companies).
Key Differences: Technical, Commercial, and Regulatory
1. Interconnection and Infrastructure
BTM:
– Requires minimal grid interaction; usually connects at the customer’s low- or medium-
voltage point of supply.
– Suitable for sites with reliable grid access or those looking to go partially or fully off-grid.
– Load and generation are co-located, reducing transmission losses.
Wheeling:
– Requires grid interconnection at the point of generation (typically high voltage) and
registration of both ends with Eskom or the local municipality.
– Often necessitates metering at both ends and adherence to wheeling frameworks that vary
by jurisdiction.
– More complex commissioning and grid compliance processes.
2. Permitting and Licensing
BTM:
– Systems ≤1MW are exempt from licensing but require NERSA registration.
– May still require SSEG approval from the local authority.
– Environmental approvals depend on project size and location.
Wheeling:
– Systems typically > 1MW but < 100MW (for strategic reasons) also don’t require a NERSA
generation license.
– Requires wheeling agreements with Eskom and/or municipal distributors.
– Must comply with additional permitting such as Grid Impact Assessments, Use-of-System
agreements, and potentially WULA and SPLUMA approvals depending on the site.
3. Commercial and Financial Considerations
BTM:
– Immediate savings on electricity bills by offsetting grid purchases.
– ROI driven by tariff escalation, system performance, and load match.
– Can be implemented quickly (3–6 months typical lead time).
Wheeling:
– Enables IPPs to aggregate multiple off-takers, making it attractive for developers.
– Allows energy sales to clients across geographies (corporate campuses, retail chains, etc.).
– Long development timelines due to regulatory complexity (12–24 months typical).
– Savings depend on negotiated PPA rates, wheeling charges, and network availability.
4. Risk and Operational Control
BTM:
– Customers retain full control of the system.
– Lower operational complexity; minimal dependency on third-party agreements.
– Limited scalability beyond the site boundary.
Wheeling:
– Requires robust contractual and operational frameworks, including SLAs and credit
assessments for off-takers.
-Higher risk exposure due to regulatory, curtailment, and transmission interruptions.
– Suited for developers with project finance capability and legal support.
Which One is Best for You?
Behind-the-Meter is best suited for:
– Manufacturing plants, commercial buildings, retail centres, or farms with available roof/land
and daytime energy loads.
– Entities looking to lower Opex quickly with minimal bureaucracy.
– Organisations wanting direct control of their energy asset without regulatory hurdles.
Wheeling is ideal for:
– Independent Power Producers (IPPs) looking to supply multiple customers or sign long-
term PPAs.
– Corporates with multiple sites and sustainability targets looking to centralize generation.
– Large users in municipalities with wheeling frameworks (e.g., Cape Town, eThekwini,
Ekurhuleni).
– Energy traders and aggregators seeking scalable revenue streams across regions.
Our Role: Simplifying the Complex
At Hammer & Anvil Energy, we’re more than engineers. We are your strategic partner in
navigating South Africa’s complex energy environment.
Whether you’re a commercial property group evaluating rooftop solar or an IPP structuring
a wheeling-enabled energy portfolio, our full-spectrum offering—from project development
and EPCM to financial advisory and regulatory compliance—ensures that your renewable
energy strategy is efficient, compliant, and future-proof.
We secure permits from Eskom, NERSA, DWS, and municipalities, manage EIAs,
SPLUMA, and WULAs, and design bankable systems that unlock real savings. Our team
understands the nuances of both BTM and wheeling, and we tailor our services to your
specific needs, risks, and ambitions.
Let’s Power a Greener Tomorrow—Together
Choosing between wheeling and behind-the-meter isn’t just a technical decision—it’s a
strategic one. With deep expertise, regulatory insight, and a strong delivery track record,
Hammer & Anvil Energy is ready to help you take the next step on your energy journey.
