Chances are that you’ve installed solar panels and converters at significant cost, just to have loadshedding suspended for an unprecedented period since we’ve first encountered it in 2007. It is a little ironic, but of course having a dependable electricity supply is crucial for the bigger economy and even though you might still be paying that solar panel loan, there are plenty of positives. The dramatic hike in electricity tariffs planned for 2025, is but one of the reasons to be grateful for going solar. But how did Eskom manage to suddenly get it right and what is the status of solar in South Africa?
The BBC wrote a detailed article on the joy and relief of South Africans with Eskom managing to keep the lights on. According to this article the main reason is that many of the actions employed over the last few years, eventually filled the pipeline to get to the preferred result.
These actions include:
- 2022 Energy Action Plan
- Appointment of electricity minister, Kgosientsho Ramokgopa
- The two-year Generation Operational Recovery Plan – the key aim of which was to increase the amount of power (“Energy Availability Factor” or EAF) to 70% of the network’s potential
- New leadership
- A good mix of employees – over 40 000 of them – who, according to the article, are now more committed and motivated
- A R254 billion debt-relief package
- A programme of planned maintenance that led to the highest energy capacity in six years on 23 July 2024 – 35 000 MW
- Total demand for electricity has been reducing due to increasing energy bills and the availability of alternative energy sources
While it might be hard to believe, we have been loadshedding-free since March this year. We might, however, opt to switch off our own lights if Eskom’s suggested 36.1% electricity price hike comes to effect in April 2025. If approved, this hike would then be followed by a further 11.8% increase in 2026 and 9.1% increase in 2027. We already had an 18% increase in 2023 and a 13% increase in 2024 – way above inflation that currently sits at 4.4%. Why such a big hike?
According to Dr Steven Mathetsa the actual cost of supplying electricity has to be kept in mind. Because of both loadshedding and price hikes in previous years, companies and individuals have moved to solar supply and the result is a 2% decrease in electricity sales and therefore revenue. He also says that despite about 200 days of no loadshedding, we are unable to provide affordable, environmentally friendly and reliable electricity. He blames this on the fact that different energy policies are not in alignment as well as a lack of investment in electricity and dependency on coal-fired power. With around 78% of our electricity being produced by burning coal, South Africa also has a long way to go to reach the 2015 Paris Agreement greenhouse gas reduction goals.
For companies and individuals alike solar seems like a good option. Not only are we optimising on our sunny climate, but we are making an environmental-friendly choice, are more self-sufficient and less subject to excessive price hikes. So, what is the state of solar in South Africa?
According to an Investec, residential solar installations make up about 85% of the South African solar installations. Across all market segments (solar and households), we’ve seen a growth of 53% and have about 148 000 solar installations. There is also significant growth in the large-scale solar PV market but there is plenty of room to grow as we are only a distant 10th on the global list of gigawatts produced from solar energy. At around 4.3 gigawatts we are far behind the number one country, which is China at 313 gigawatts. We are however lacking even more when looking at the installed capacity per person where we are at approximately 132 watts per person compared to Australia’s 1116 watts!
But it is not just about our global standing, solar power is about making a difference in our everyday lives. Even when loadshedding is off the cards, expensive and environmentally unfriendly energy might still encourage us to go the solar route, especially as we live in a country with abundant sunshine. The initial cost for solar is however, somewhat of a barrier. For a typical household, a 5kW PV system with two hours of battery energy storage is sufficient, but it will put you back somewhere between R125 000 and R225 000. Recently, solar installation prices have been going down because there has been a reduction in the cost of the manufactured models, inverters and energy storage system. Tax incentives also play an important role to motivate going solar despite the installation expense.
I believe we should optimise on solar for the obvious green reasons that it offers renewable energy with a lower carbon footprint. It also gives you more independence from official energy providers, can help your business through possible future load reduction or shedding and helps to reduce your energy bill. While the initial expense might be significant, the price of solar installation is going down and tax incentives are often available. Maintenance on solar is minimal and panels usually have long warranties. As an industry, solar installation also creates opportunity for small businesses and to create jobs across the country – from cities to rural communities, for businesses and households.
We can give quite the literal interpretation to “Make hay while the sun shines”, can’t we?!