Imports of solar panels reached an all-time high of R3.6 billion in South Africa in the first quarter of 2023, three times higher than the previous quarter.
The value of imports in the first three months of 2023 is almost as much as the entire value imported in 2022, which was R5.6 billion.
Gaylor Montmasson-Clair, a senior economist at Trade and Industrial Policy Strategies, said this is due to sustained demand from South Africa’s private sector.
Since 2010, South Africa has imported R35 billion worth of solar panels. Imports were initially supported by government investment into renewables but are now primarily supported by private investment.
Sustained demand is vital for building a local industry based on solar energy generation, Montmasson-Clair said.
South Africa has two solar panel manufacturers, ART Solar and SeraphimSolar. The latter is a Chinese company with a local factory.
Based on the assumption that solar panels cost $0.2 to $0.3 per watt, Montmasson-Clair estimates South Africa added 667MW to 1,000MW of solar capacity in the first quarter of 2023.
Following the same assumption, the country added 1,100MW to 1,700MW across the entire year of 2022.
Increased load-shedding has pushed many South African citizens and companies to invest in alternative energy sources, such as solar.
This is a particularly positive development in solving ongoing load-shedding in the country, with the private sector stepping in to bolster electricity generation.
Private sector is taking over
As mentioned by Montmasson-Clair, government investment in renewable energy has stagnated and the private sector has picked up the slack. Data collected by PwC supports this.
Over the last three years, 4,550MW of private solar generation capacity has been added to the grid. It is expected to increase to 6,850MW by the end of 2023.
Private-sector renewable generation will be almost on par with the total capacity of the government’s Renewable Energy Independent Power Producer Programme (REIPPP).
It indicates that, although quietly, privatisation is occurring in South Africa’s electricity supply.
However, as PwC notes, there are still significant hurdles to feeding private renewable energy into the grid, and South Africa will require coal-fired power for the foreseeable future.
Solar generation will make a difference, but it is “not going to solve our problems”, according to PwC. It has to be combined with other sources of generating electricity.