by Maloba Tshehla, SAPVIA
The South African solar PV market continues to grow rapidly, with positive market indicators coming out of various national government policy objectives. Annually installed PV capacity in 2020 totalled 1313 MW, broken down into 813 MW of utility-scale systems and 500 MW of distributed generation. Cumulative capacity reached 4172 MW, of which 2372 MW is provided by utility-scale solar.
It is estimated that 20% of this distributed generation capacity consists of residential systems, with the commercial and industrial (C&I) segment contributing the largest bulk of rooftop capacity.
The government’s Integrated Resource Plan (IRP2019) outlined a new additional capacity of 6 GW utility-scale solar PV and 6 GW distributed generation, the majority of which is expected to come from solar, to be installed by 2030.
The IRP electricity infrastructure development plan is based on least-cost electricity supply and demand balance, considering security of supply and the environment, and will result in a 400% increase of solar PV by 2030. This will increase the PV installed capacity from 3% of the current total electricity supply to 11% by 2030.
The policy landscape continues to change as government and industry work to meet the increasing energy needs of the country while also striving to drive a post-covid economic recovery. The commitment of President Cyril Ramaphosa to amend Schedule 2 of the Electricity Regulation Act (ERA) so as to raise the licensing exemption threshold for distributed generation facilities from 1 MW to 100 MW, should cause a rapid increase in the development of larger scale distributed generation projects.
This work on updating the regulations that will allow municipalities to develop and procure their own power generation projects shows that the government is working hard to create the right policy environment to let the industry fully realise the IRP2019 targets.
SAPVIA’s growth reflects that of the industry itself.
From just six members in 2010, the association now represents 544 members across the solar PV value chain. Its members reflect the diversification of the sector, as it has moved from its initial focus on the utility-scale market through government procurement to an open, distributed market.
There are still challenges ahead for the solar PV market in South Africa. As a priority the IRP should be reviewed and updated to better enable government policy planning.
Progress has been hampered by a lack of consistency in the procurement of solar PV projects. However, it must be noted that over the last 12 months the government has responded with pace and urgency. For the industry to fully realise the opportunities of renewable energy and solar PV specifically, we need long-term commitments from the government to procure on a more consistent basis.
If the industry is confident of a future procurement pipeline, it would be more likely to invest with confidence in local manufacturing, which would develop and thrive, offering more opportunities for local employment and upskilling.
As a matter of urgency, we must address the capacity challenges at energy distributor level, implementing the right and most appropriate bureaucratic processes to allow policy to be implemented. We also need regulations and enforcements that ensure that the highest safety and quality standards are rolled out and maintained across all distributed generation projects.
As confidence in the market continues to grow, we see the introduction of more innovative solutions which allow renewables to compete with traditional energy sources. We also need more innovative funding models that allow for more participation from non-traditional investors.
Looking forward, the growing solar PV industry must not lose focus on the just energy transition that solar PV and renewables in general can deliver for South Africa. We need to ensure that as the sector grows, we include, uplift, and upskill South Africans, not just through access to cheap, sustainable electricity but by focusing attention and resources on helping communities adapt and benefit from our transition to renewable energy.
The just transition must draw commitments from players across the sector as well from the government, and labour to elevate and empower through skills development. We have an opportunity to create an optimal workforce that delivers a best-in-class, sustainable energy infrastructure for South Africa.
SAPVIA is the voice of the solar PV industry in South Africa.