Eskom getting replaced – one solar panel at a time

Chinese customs data indicates South Africa has imported over 5,000 MW of solar panels from China since the beginning of 2022. 3,700 MW was imported this year alone. 

This data was compiled by energy think tank Ember Climate, which released a report analysing China’s solar exports this week. 

China exported 114,000 MW of solar panels in the first six months of the year, with over half going to Europe. 

The fastest growing market for Chinese solar panels is Africa and the Middle East, driven mainly by South Africa. 

South Africa’s imports of Chinese solar panels skyrocketed 438% compared to a year earlier, with the country importing 3,700 MW of solar panels in 2023. 

At peak production, the amount of solar imported is equivalent to the generation capacity of Eskom’s Duvha power station or Matla power stations, which both have an installed capacity of 3,450 MW.

The solar imports have more capacity than many of Eskom’s smaller power stations, such as Hendrina, Grootvlei, and Arnot.

Ember cited frequent load-shedding and short-term tax incentives from the government as the factors contributing to the rapid rise of solar imports in South Africa. 

Trade and Industrial Policy Strategies senior economist Gaylor Montmasson-Clair has previously said the rise in solar panel imports is due to sustained demand from South Africa’s private sector. 

Montmasson-Clair calculated the value of imports from China since January 2022 to be R20.9 billion ($1.1 billion).

The import of solar panels hit a new record in the second quarter of 2023, with R8.4 billion worth of panels being imported, over double the amount imported in the year’s first quarter.

The value of imports in the first half of 2023 is more than the entire value imported in 2022, which was R5.6 billion.

R12 billion worth of solar panels have been imported by South Africans so far in 2023.

Montmasson-Clair has previously lamented the lack of development of a local industry to supply this growing demand for solar panels, batteries, and inverters. 

South Africa imported R47.5 ($2.5 billion) worth of solar panels, batteries, and inverters in the first six months of 2023, indicating a decreasing reliance on Eskom for energy generation. 

This is also a missed opportunity for local industrialisation as sustained demand is vital for building a local industry based on solar energy generation. 

South Africa has two solar panel manufacturers, ART Solar and SeraphimSolar. The latter is a Chinese company with a local factory.

The country has also demonstrated sustained demand for lithium-ion batteries, with R20.6 billion ($1.1 billion) of batteries imported in the first half of 2023. 

This is already more than the R13.1 billion ($0.7 billion) imported in 2022. 

Unlike the manufacturing of solar panels, South Africa has a significant number of lithium-ion battery manufacturers, said Montmasson-Clair. 

However, they tend to import battery cells from China and process them into battery packs rather than manufacturing all components locally. 

South Africa has imported a combined R47 billion worth of solar panels, batteries, and inverters so far in 2023.

A lack of local manufacturing of components used in renewable energy generation, such as solar panels, batteries, and inverters, is a missed opportunity to kickstart South Africa’s industrial base and reindustrialise.