As South Africa grapples with escalating electricity prices, investment in solar photovoltaic (PV) and battery energy storage is gaining momentum.
This is according to experts in South Africa’s energy sector, during a webinar hosted by EE Business on September 5, discussing the growing market for solar PV and battery energy storage as load shedding recedes.
Solar PV adoption has shifted from a reactive measure against load shedding to a financially motivated decision. “We’re transitioning from a backup market to a market driven by financial returns,” said Andrew Middleton, CEO of GoSolr.
He called for regulatory reforms to foster a more open and competitive energy market. “Electricity generation should operate within an open market framework to ensure fair pricing and reflect market dynamics.”
Managing Director of Vantage Green X Alistair Campbell provided a macro-economic overview of the market. He said the escalating cost of electricity is due to long-term investments in traditional infrastructure. “We’ve been paying for Medupi since 2008, which has forced up the price of electricity so sharply that putting in solar battery systems is no longer a nice-to-have. It has become essential.”
The Carbon Border Adjustment Mechanism (CBAM), a new European regulation, may impact countries with high carbon emissions, he added. “The penalties could affect the viability of South African businesses going forward.”
There is a need for long-term, affordable financing for solar projects, particularly in the commercial sector, said Jonty Sacks, Partner at Jaltech.
“The traditional banking sector’s short-term funding models often present obstacles for potential investors. Banks typically require end customers to contribute around 30% equity. This can be a significant barrier for solo installers or developers who may not have anticipated this requirement.” He advocates for alternative funding solutions to address these challenges.
The industrial sector has specific needs with particular focus on grid access and the increasing importance of utility-scale battery storage, said Tim Hill, Director of Energy Group. “We’re seeing rapid development of renewable energy projects and battery storage is becoming more viable as prices come down.” He also emphasised the critical importance of batteries in stabilising the grid as the country’s energy mix continues to diversify.
