(Source of information: Mordor Intelligence / Image credit: Enel Spa)
The first event of the Solar and Storage Live calendar in 2024 is Solar and Storage Live Africa in Johannesburg between 18-20 March 2024.
South Africa is experiencing a rise in the deployment of solar generation but the continued potential of solar in the country is particularly exciting.
South Africa receives sunshine for more than 2500 hours per year. Subsequently becoming a focal point for developing the solar market in Africa and the Middle East.
The current market size of solar is estimated at 6.68gw (in 2024) with this expected to increase to 11.03gw by 2029.
At its current rate, South Africa is expected to register a Compound Annual Growth Rate of 10.56% during the forecast period of 2024-2029.
Increased demand for clean energy generation is expected to stimulate market growth of South Africa’s solar energy market.
In order to increase Solar’s impact on the country, South Africa must reduce their reliance on fossil fuels. Only then will renewable energy experience a significant market growth.
Industry Action and Government Policy
The South African government have set an industry target of generating 18gw of renewable energy by 2030 with solar expected to make a significant proportion of this target.
The Renewable Energy Independent Power Producer Procurement Programme was established to help facilitate reaching this target.
This programme has successfully attracted investment and support with over 600mw worth of renewable energy projects being allocated to bidders. Most of these projects will be focused on wind and solar generation.
In 2022, South Africa also launched a 300mw renewable energy programme. The first round of funding focused on procuring independent power producer projects with capacity ranges between 5mw and 20mw. The second funding round focused on projects on over 20mw.
South Africa’s efforts to reduce its reliance on fossil fuels and increase market growth of renewables is moving in the right direction. However, South Africa is still the 7th largest coal producer in the world with coal-based thermal power plants accounting for 76% of electricity generation in 2021.
The Climate Commission of South Africa have set out to transition the country from a fossil fuel-based system to a renewable power system.
To do this, a deployment of 150gw of wind and solar capacity is needed by 2050. Registering an increase of 4gw per year.
According to the Blended Finance Taskforce and Slettenbrook University Centre for Sustainability Transitions, South Africa will need approximately $260billion over the next 3 decades to transform to a renewable energy system. This is 3% of South Africa’s annual gdp.
The deployment of Solar PV has become a significant focus for the energy industry in South Africa with solar PV segments expected to dominate the market. In 2022 total installed capacity is estimated at 5.826mw.
Since 2022, energy companies have pledged to commit to a significant increase in the deployment of solar.
Solar provider Solana Energy announced that households in South Africa imported over $120,648million worth of solar PV panels.
6 private renewable developers signed 20year PPAs with South African utility Eksom Holding to construct 13 solar PV plants. These plants will have a combined capacity of 957mw.
According to South Africa’s Photovoltaic Industry Association, once capacity is installed it will surpass over a decade worth of government action regarding Solar energy procurement.
Market Leaders in the South African Solar Market:
- Canadian Solar inc.
- IBC Solar AG.
- Segen Solar (pty) ltd.
- ART Solar (pty) ltd.
- Energy Partners Holding.
What is happening in South Africa?
Solar Capital has connected a 86mw solar PV plant to the grid in South Africa’s Northern Cape. This new solar farm will generate enough energy to provide thousands of homes and businesses in the region.
In 2023, South African construction company Concor announced it is expanding into solar power.
The project will provide an additional 5.74mw of solar power to the existing 1mw grid-tied plant adjacent to a shopping centre.
Projects like this align with the 2030 net zero targets arranged to reduce energy reliance on South Africa’s unreliable, fossil fuel heavy grid.
Conclusion
Overall, the South African solar market is registering increases in deployment and market growth. Government policies are in place and are contributing to the shift to a renewable energy system. However, industry specific bodies seem to be facilitating the majority of this change. South Africa must increase their efforts, at both industry and government level, to move away from their unreliable fossil fuel based system to a fully renewable electricity grid.
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