South Africa Rooftop Solar Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

South Africa Rooftop Solar Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The South Africa Rooftop Solar Photovoltaic (PV) market is expected to reach 1734.4 MW by the end of this year and is projected to register a CAGR of over 8.04% during the forecast period.

The market was negatively impacted by COVID-19 in 2020. Presently the market has now reached pre-pandemic levels.

Key Highlights

• Over the medium term, the growing government support and falling cost of rooftop solar panels purchase, installation, and maintenance are expected to support the uptake of solar PV and associated systems in South Africa driving the solar rooftop PV market in the country.​​
• On the other hand, the high cost of solar rooftop systems and the associated need for batteries for electricity storage are likely to restrain the market growth.
• Nevertheless, Owing to the increasing blackouts in the country, leading to the electricity crisis and increasing demand for continuous power, several opportunities are expected to be presented for the market players in South Africa to bridge the supply and demand gap.

Key Market TrendsCommercial and Industrial Segment is Expected to Dominate the Market

• As of 2021, the commercial and industrial sector accounted for more than 50% of the overall rooftop solar installations in South Africa. Supportive policies and the development of innovative technologies are needed for the commercial and industrial sector's growth. South African policymakers need to plan for rooftop solar systems along with storage, rather than just rooftop solar systems with a grid as storage (net/gross metering). The combination is cost-effective for electricity generation compared to the traditional grid supply and diesel generators.​
• By 2021, solar and storage were cheaper than grid supply for most commercial and industrial customers across South Africa. According to the Institute for Energy Economics and Financial Analysis, the levelized cost of energy for a 1 MW rooftop solar installation, coupled with a 250-kilowatt energy storage system, will cost approximately ZAR 1.32 - 1.36/kWh in 2022. The cost of installing solar rooftop systems for commercial and industrial consumers is expected to decline further during the forecast period compared to grid tariffs and the cost of the power produced by diesel generators.​
• The commercial and industrial sector in South Africa is expected to witness significant growth in the market in the coming years due to the affordability and the need for technology. The commercial and industrial sector generally incurs higher electricity costs for being one of the highest energy users. The sector also has the best use profiles and stands to benefit from installing rooftop solar PV systems across large roof spaces.​
• In October 2021, work began on the solar rooftop power plant on Cornubia Mall in KwaZulu-Natal. The plant has a direct current capacity of 5.25 MWp; it was expected to start commercial operations in April 2022.​
• Further, in March 2022, Investec Property announced its plans to construct a solar PV rooftop plant at Cornubia Mall in Kwa-Zulu Natal, South Africa. The plant is estimated to have a DC capacity of 5.25 MWp and an AC capacity of 4.29 MW and will power the entire mall and reduce stress on the electricity grid.​
• Moreover, rooftop solar systems generate electricity during daylight, coinciding with the peak hours of most factory operations. Hence, while the sun is out, manufacturing facilities can either limit their dependence on the national grid or abandon it completely.​
• Further, commercial and industrial organizations across South Africa are gradually seeking opportunities to reduce their dependence on the state utility, which has been facing financial and operational issues. ​
• In South Africa, commercial and industrial enterprises have many options to finance their electricity requirements. Rooftop solar systems remain the most favorable alternative to grid electricity in the country.​
• A growing number of commercial properties in South Africa are opting for fixed roof rental options. Here, the unused roofs are monetized through a long-term rental agreement. The energy generated is used by the commercial property, and excess energy is sent to the grid for further distribution.​
• The development of such agreements in South Africa is expected to boost the market demand in the commercial and industrial sector during the forecast period.​

High Domestic Solar Potential Expected to drive the Market

• South Africa is a large country with a low population density, and due to its geographical position, the country receives a high amount of solar irradiation throughout the year. The South African government has identified the high photovoltaic potential of the country, and efforts are underway to maximize the utilization of the country’s solar potential by accelerating the country-wide adoption of rooftop solar PV capacity.​
• South Africa has an average of more than 2,500 hours of sunshine per year, and the average solar radiation levels range between 4.5 and 6.5 kWh/m2 per day. The country’s Northern Cape is one of the most attractive solar resource areas, with a daily average solar PV output capacity above 5.6 kWh/kWp. ​
• Due to the climate, which results in year-long sunshine, South Africa’s annual 24-hour global solar radiation average is about 220 W/m2, which is significantly higher when compared to certain regions in the United States (<150 W/m2), Europe, and the United Kingdom (<100 W/m2)​
• However, due to rising energy consumption, South Africa faced an acute energy shortage, with 1130 hours of planned power cuts experienced in 2021. In March 2022, ESKOM declared that it was planning for about 61 days of load-shedding between April 1, 2022, and August 31, 2022. ​
• To combat this power crisis and provide energy security to its citizens, the government has been actively promoting the adoption of rooftop solar PV systems in the residential and commercial sectors. The South African government has already committed to a target of achieving net-zero emissions by 2050 and set a concrete target of an increase in the share of renewable energy from the current state of 11% to about 41% of the total electricity generation by 2030 with the hope to reduce the share of fossil fuels from 80% to about 51%. Of this total planned renewable capacity, solar PV is expected to account for nearly 8,288 MW.​
• To provide energy security in off-grid regions, most remote and indigenous communities have started to switch to rooftop solar photovoltaics for providing electricity. As South Africa has a huge mining industry, and most mineral resources and mines are situated in the interior of the country, the mining companies are another significant user of solar PV panels. Additionally, due to the ongoing electricity crisis, many commercial and industrial consumers are starting to invest in the installation of rooftop solar PV panels in roofs in their buildings and other facilities to power operational requirements.​
• For instance, in March 2022, Investec Property announced that it was planning to install South Africa and Africa’s largest solar rooftop project on the roof of the Cornubia Mall in Kwa-Zulu Natal. The project will have a DC capacity of 5.25 MWp and an AC capacity of 4.29 MW and will be installed by Terra Firma Solutions.​
• Such efforts and investments to guarantee energy security by capitalizing on the country’s high photovoltaic potential are expected to provide a positive impetus to the growth of the South African rooftop solar market during the forecast period. ​

Competitive Landscape

The South African rooftop solar market is moderately consolidated in nature. Some of the key players in the market (in no particular order) include GENERGY, Valsa Trading (Pty) Ltd, JA Solar Holdings, Solareff (Pty) Ltd, and BrightBlack Energy among others.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
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