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Overview of South Africa's solar power sector
Kind: ICD What's New  Organization: Department of International Cooperation  Publish Date: 2021-11-29 16:11
With most areas in South Africa averaging over 2,500 hours of sunshine per year, the country's solar power sector has strong potential. South Africa's annual 24-hour global solar radiation average is about 220 watts per square meter, as compared with about 150 W/m2 for parts of the U.S. and roughly 100 W/m2 for Europe.

South Africa's recent energy policies are quite progressive and forward-looking. In order to fulfill its 2015 UNFCC Paris Agreement pledges, the government in 2019 launched the Integrated Resources Plan aimed at increasing the country's total power generation by 29,488 MW by 2030 -- including 22,900 MW from renewable energy sources (6,000 MW from solar power, 14,400 MW from wind energy, and 2,500 MW from hydropower), and just 3,000 MW from natural gas and 1,500 MW from coal.

In addition, the government has launched the Renewable Energy Independent Power Producer Procurement Program, allowing the state-owned electricity enterprise Eskom to procure electricity from independent power producers. Eskom has so far bought 5,243 MW of solar and wind power from private enterprises. The program has effectively solved the problem of power supply instability stemming from the obsolescence of the nation's coal-fired plants and has further liberalized the country's energy sector, especially boosting the prospects of the renewable energy sector.

Given that South Africa's Department of Mineral Resources and Energy has relaxed the restriction on the capacity of embedded self-use power generation from 1 MW to 10 MW in 2021 and has further liberalized the country's energy supply chain, solar power has become more appealing to small electricity consumers such as households and factories, according to South Africa-based financial services provider Absa Group. Although the costs of setting up solar power installations are high, self-use solar power generation cuts power costs, so solar power generation is a beneficial long-term investment.

In sum, the outlook for South Africa's renewable energy sector is good. Taiwanese solar energy enterprises looking to establish a foothold in the country can engage in cooperation with local firms to boost their chances of winning Eskom's electricity procurement tenders. And after the pandemic, they can also participate in related trade fairs, such as the Solar Show Africa and Africa Energy Indaba, to raise the visibility of their products in South Africa's self-use solar power generation market.

Sources: Taipei Liaison Office in the Republic of South Africa; South African Department of Mineral Resources and Energy; Eskom website
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Update: 2020-04-23
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