Eskom failures set to make South Africa world’s 10th largest solar market

South Africa’s electricity crisis has led to a massive solar boom, as the country is expected to become the world’s tenth-largest solar photovoltaic (PV) market this year.

This is according to BloombergNEF’s global PV market outlook for the first quarter of 2024, which predicts that South Africa will be the tenth-largest PV market in the world this year.

According to the report, the global PV industry added about 444 GW of new capacity in 2023 internationally, a 76% increase from 2022. 

In addition, prices of solar modules are at record lows, and there is a plentiful supply of components. Therefore, installations this year are expected to top 520 GW globally.

In South Africa, Eskom estimates that rooftop solar additions totalled 2.6 GW in 2023.

However, the BloombergNEF database tracked an additional 676 MW. This takes the total for 2023 to about 3.3 GW.

In 2024, the report expects rooftop solar to grow, particularly in the winter months of May, June, and July, when load-shedding is more frequent and severe. 

Residential demand for solar is linked directly to load-shedding and slows down as soon as load-shedding stops. The report also expects business adoption of rooftop solar to accelerate.

In South Africa, there was a massive peak in demand for solar products in the middle of 2023 – the year in which the country faced the most intense and frequent load-shedding it had ever seen.

Demand skyrocketed at the beginning of 2023, with R3.6 billion of solar panels imported in the first quarter alone. 

This was followed by a record second quarter, with R8.4 billion worth of solar panels imported. 

This was partly due to the fear of increased load-shedding during winter, with warnings that the country would likely hit stage 8 load-shedding and beyond. It was also the quarter where the rooftop solar tax break came into effect.

Sustained demand has created local business opportunities and a local solar panel manufacturing industry potentially emerging. 

Since 2010, South Africa has imported close to R40 billion worth of solar panels. Imports were initially supported by government investment into renewables but are now primarily supported by private investment.

Trade and Industrial Policy Strategies Gaylor Montmasson-Clair recently revealed that the value of solar panel imports hit R17.5 billion in 2023 – triple the R5.6 billion spent in 2022.

According to SAPVIA, 90% to 95% of new residential solar installations and about 85% of commercial ones have battery electric storage for a few hours. 

The pipeline of solar projects registered with Nersa since the beginning of 2023 totals 4.3 GW, according to SAPVIA’s data portal.

BloombergNEF forecasts that South Africa will add solar capacity of between 4.0 GW to 4.5 GW in 2024, reaching a cumulative capacity of about 36 GW in 2030.


Top JSE indices