The prohibitive cost of extending the grid to remote rural areas is the impetus for the development of non-grid (often renewable sourced) electricity programs in South Africa. In November 1998, Shell subsidiary, Shell Solar South Africa, and Eskom launched a multi-million dollar project to supply solar energy to 50,000 low cost housing units. The firms will provide the infrastructure, while the recipient communities will establish various ventures for supply and maintenance. The project is establishing 4-5 regional centers to manage collection and sales of appliances. To make the systems affordable for residents, the project is charging households $10 a month rather than billing customers for the cost and installation of the units. At the end of 2000, over 6,000 solar home systems had been installed, bringing electricity to an estimated 30,000 people.

In May 2002, the German government signed a financing agreement with the SAG for a non-grid electrification project. The project, which will take place in the North West and Eastern Cape provinces, will electrify approximately 30,000 households.

French-based Electricite de France (EDF) and Total signed an agreement to supply solar energy to 15,000 rural homes in Kwazulu-Natal. Each participating household will be supplied with a solar panel and a battery capable of powering lighting, television and radio. EDF has a 65% interest and Total 35% in the electrification project.

Eskom has initiated the South African Bulk Renewable Energy Generation (SABRE-Gen) program to evaluate the viability of utility-scale renewables projects. Eskom currently has over 2,000 megawatts (MW) of renewable-based capacity, all hydroelectric (1,400 MW of pumped Storage and 661 MW of conventional hydropower). Eskom has developed the largest wind farm in sub-Saharan Africa at Klipheuwel in the Western Cape. The three-year, experimental project currently generates enough power for approximately 2,500 households. However, it is one of the options being considered by Eskom to provide clean renewable energy.

Plans call for South Africa's first commercial wind project to be situated in the Western Cape at Darling. Sponsors of the project include: SAG, Danish International Development Assistance Group, and the UN's Global Environment Fund. The project has received an independent power licence from NER in June 2002, but environmental concerns (impact of the project on local bird life) have delayed construction. Cape Town may be the first city in South Africa to offer consumers the option of buying power from a renewable source. The city's Director of Electricity said the option would become available once Darling Wind Farm comes on stream.