South Africa ramps up commercial solar installations to counter load shedding

By Conrad Onyango, via bird story agency

South Africa is leading other countries in a radical shift towards more reliable energy sources as its business and industry owners contributed the highest addition of the 3.7-Gigawatt peak (GWp) in new solar capacity on the continent in 2023.

The Africa Solar Industry Association (AFSIA) annual Solar Outlook 2024 released recently revealed that South Africa more than doubled its new solar installations, from 1.4GWp in 2022 to 2.96 GWp last year.

In this unprecedented surge in solar installations, 75% of South Africa’s new capacity comes from commercial and industrial (C&I) projects alone, in what appears as a response to frequent power cuts that have been plaguing the country.

“In (the) absence of reliable utility companies and grid supplying the required electricity, African companies and businesses finally have found an alternative with solar and storage thanks to plummeting prices of both key components,” said the report.

Since 2022, South Africa’s national utility company, Eskom, has implemented some of the deepest power cuts on record, sometimes lasting for up to nine hours a day, nationwide.

In a statement in early January 2024, Eskom announced the resumption of load shedding after an 18-day suspension – the longest period without power cuts, in two years.

By the end of 2023, South Africa had installed at least 7.78 GWp of solar power, representing almost 47 % of all installed capacity on the continent.

A constant decline in prices of solar and storage, the report said, is making the switch to solar easier and more affordable every day in South Africa – as well as in other markets on the continent.

South Africa’s transition to solar energy has been supported by a strong financing environment that understands solar and can propose adequate financing instruments for all kinds of solar project requirements.

The cumulative solar capacity of Africa now stands at 16.3 GWp, including more than 1 GWp of unassigned solar capacity.

Commercial and industrial solar capacities are on the rise across the continent, with AFSIA showing that private installation has surpassed government utility installation in a number of countries since 2022. In 2023, 65% of the added capacity was through commercial and industrial projects. South Africa made up the lion’s share.

“By switching very radically and swiftly to self-reliance on solar for electricity supply, South Africans are showing a clear path to the rest of the continent. A path where alternative options do exist and are financially viable if the national utility fails,” according to the report.

Other African countries that witnessed a significant rise in commercial and industrial solar projects in 2023 include Mauritania, with 84 Megawatt peak (MWp) and Egypt (37.5MWp).

In Nigeria, out of the 34.7MWp newly installed capacity, 23.8MWp came from commercial and industrial projects while in Kenya, out of the 69MWp of new installations, C&I accounted for 10.5MWp, with large-scale installations enjoying a bigger share of 57MWp.

Madagascar (10.7MWp) and Mozambique (11.3MWp) are also witnessing a rise in newly installed industrial solar capacity.

In 2019, a report entitled “Solar for Businesses in Sub-Saharan Africa” also showed that the growth of the commercial and industrial (C&I) solar sector in Sub-Saharan Africa is due to economics rather than regulatory support.

The reports said this was a stark difference from many developed economies where the sector is supported by regulation.

The report, backed by BloombergNEF, revealed that in seven out of the 15 markets surveyed, on-site solar was cheaper than the electricity tariffs paid by commercial and industrial operators.

For instance, in Kenya, Nigeria and Ghana, solar electricity for C&I customers can be generated for USD 0.10-0.14/kWh, or even lower.

BloombergNEF projected that the cost of on-site solar in Africa would decrease to about USD 0.05/kWh by 2030.
bird story agency