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Massive increase in solar panels imports in South Africa

March 13, 2024

In 2023, South Africa found itself grappling with unprecedented levels of load-shedding, prompting a surge in the importation of solar panels, inverters, and batteries. The import value soared to a staggering R17.5 billion, marking a threefold increase from the R5.6 billion expenditure recorded in the previous year, 2022. Gaylor Montmasson-Clair, a senior economist affiliated with the Trade and Industrial Policy Strategies (TIPS), disclosed this notable surge.

The prolonged and severe load-shedding episodes experienced in the country during 2023 led to an upswing in the demand for solar solutions. As businesses and households sought to adapt to the challenges posed by an unreliable energy supply, the allure of solar power as an alternative energy source gained significant traction, diminishing reliance on Eskom, the national electricity supplier.

Analysing the data presented by Montmasson-Clair, a substantial peak in demand materialised in the middle of 2023. The demand surge commenced in the first quarter, witnessing a substantial R3.6 billion worth of solar panel imports. This momentum continued into the record-breaking second quarter, with a staggering R8.4 billion worth of solar panels entering the country.

 This surge was fueled by concerns about heightened load-shedding during the winter season, with projections hinting at the possibility of reaching stage 8 load-shedding and beyond. Additionally, this quarter saw the implementation of a tax break for rooftop solar installations, further contributing to the increased demand.

The sustained demand for solar solutions has not only addressed the immediate energy needs but has also fostered the growth of local business opportunities. There are indications of a burgeoning local solar panel manufacturing industry, potentially shaping the country's economic landscape.

Over the past decade, South Africa has witnessed a cumulative import expenditure of nearly R40 billion on solar panels. Government investments in renewables drove the initial impetus for imports, but the landscape has shifted, with private investments playing a predominant role in supporting and sustaining the solar industry.

In its Weekly System Status report, Eskom estimated a substantial 5,412 MW of private rooftop solar installed in South Africa. Private entities and households contributed over 2,400 MW in the past year alone. This influx of solar capacity, while instrumental in mitigating the impact of load-shedding, has led to a decline in Eskom's sales by over 2%, as revealed in its latest financial results. This demand reduction, caused by solar installations, underscores the revenue implications for Eskom.

It is noteworthy that the reported solar capacity exceeds that of Eskom's largest coal-fired power stations, Medupi and Kusile, both having a nominal capacity of 4,800 MW. However, it is crucial to emphasise that the nominal capacity of private installations does not imply that they are generating more power than these coal-fired stations, which have faced challenges in achieving their maximum capacities due to various operational issues.

The solar energy landscape in South Africa is experiencing a transformative shift driven by the imperative need for reliable and sustainable energy solutions. The surge in solar imports, alongside the burgeoning rooftop solar installations, signifies a paradigm shift in the country's energy mix, underscoring the potential for solar power to play a pivotal role in shaping the future of South Africa's energy sector.

Source: https://mybroadband.co.za/news/investing/527243-south-africas-record-breaking-r17-5-billion-solar-panel-import-boom.html 

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