Zimbabwean companies turn to solar as diesel costs surge

Zimbabwe's major industrial firms are rapidly shifting toward solar energy as they seek to reduce operating costs and lessen dependence on unreliable grid electricity.

Manufacturers and mining companies are reporting substantial savings as solar installations replace diesel generators and help stabilise daytime production. For years, businesses have been forced to choose between erratic electricity supply from the Zimbabwe Electricity Supply Authority (Zesa) and expensive but dependable diesel power. Rising grid tariffs, especially for heavy industrial users, have compounded the challenge, making long-term energy planning increasingly difficult.

It is the escalating cost of diesel-generated electricity that has accelerated the pivot to solar. Regional studies show that diesel power can cost between US$0,40 and US$1,05 per kilowatt-hour when fuel, maintenance, logistics and equipment depreciation are factored in. For mines and remote industrial operations running generators for long hours, costs often exceed US$0,44 per kilowatt-hour - several times higher than the long-term cost of industrial-scale solar.

This cost disparity has positioned solar as the more sustainable option for companies under pressure to remain competitive. Industry data shows a rise in national solar investment, with over 25 megawatts of recent installations recorded and more projects in the pipeline. The move is supported by Government policy frameworks promoting renewable energy, a growing pool of Independent Power Producers, and public-private initiatives aimed at expanding clean energy supply by 2030.

Large industrial sites and mines are now installing hybrid systems combining solar panels, battery storage and smart controllers to run daytime operations while minimising generator use. This shift has resulted in lower fuel imports, more consistent power during working hours and improved cost predictability for finance departments. Companies such as Econet Wireless, Sable Chemicals, Schweppes Zimbabwe, Hippo Valley, National Building Society and CBZ are already producing part of their own electricity from solar.

Chamber of Mines chief executive Isaac Kwesu said the mining sector continues to grapple with acute power shortages due to limited domestic generation capacity and rising demand. He warned that outages have historically reduced output and driven up production costs, even for companies that have invested in backup systems. Kwesu added that recent tariff increases were further eroding viability and called for more competitive electricity pricing for mining operations.

The sentiment is echoed across industry bodies. Zimbabwe National Chamber of Commerce immediate past president Mike Kamungeremu said heavy reliance on diesel generators can increase overall power costs by up to 40 percent. The Confederation of Zimbabwe Industries has also urged firms to adopt renewable energy to reduce expenditure and improve operational resilience.

Industrialist Dr Nxaba Ndiweni, who recently installed rooftop solar panels and battery storage, said his company has seen a dramatic shift in operating efficiency. Before the installation, he said, generators ran for more than half of operating hours, making diesel one of the top three expenses. With solar now providing daytime power, diesel consumption has dropped sharply, production schedules have stabilised and labour shifts can be managed more effectively.

Financial institutions are also backing the transition. Banker Raymond Madziva, who assesses industrial energy projects, said lenders favour solar-plus-storage systems because projected cash flows and savings are more predictable than those of generator-based operations. The reduced strain on working capital also improves loan repayment prospects, making green financing more attractive.

Economist Dr Ronald Gatsi highlighted the broader national benefit, saying reduced reliance on imported diesel lowers foreign currency pressure, strengthens trade competitiveness and supports economic stability. He noted that with the right regulatory support - particularly around grid integration and private power offtake agreements - renewables could significantly improve margins for local industries.

Analysts say the financial argument for solar is becoming increasingly clear. If companies currently paying US$0,40 to US$0,50 per kilowatt-hour for diesel switch to solar systems that deliver cheaper power over 15 to 25 years, the long-term savings are substantial. Incentives such as VAT deferments, improved IPP regulations and donor-backed programmes have made project financing easier, allowing more businesses to pursue large-scale installations.

However, the transition is not without challenges. High upfront costs for inverters and batteries, import duties on certain components, and delays in grid-interconnection approvals have slowed the pace of adoption. Firms that operate at night or during peak hours still require diesel or larger battery banks, which remain expensive.

Industry experts say progress in renewable tariff frameworks, quicker licensing of independent producers and more accessible financing will shape the direction of the sector over the next two years. If these hurdles are addressed, Zimbabwe could witness a sharp rise in renewable energy capacity and a significant reduction in costly diesel dependence - a move that could transform the industrial landscape and boost economic competitiveness.