Last week, Eskom proudly announced a record 100 consecutive days without loadshedding, signaling a period of stability in South Africa’s power supply. While this achievement brings relief to many sectors, including industry and commerce, the solar market has witnessed a noticeable slowdown in growth.
Solar Market Dynamics Amid Loadshedding Reduction
Despite the decline in loadshedding incidents, Jaltech, a provider of solar finance through power purchase agreements, issued over 400 solar proposals valued at R4.1 billion this year. However, only 15% of these proposals have progressed, a lower rate compared to expectations if loadshedding persisted.
Jaltech’s Perspective on Solar Adoption
Jonty Sacks, partner at Jaltech, underscores the enduring appeal of solar power in South Africa’s energy landscape. Over the past year, Jaltech has successfully developed a portfolio comprising more than 160 commercial and industrial solar assets. This suggests a robust recognition among business owners of solar’s reliability and cost-effectiveness over traditional Eskom-supplied electricity.
Cost Considerations: Solar vs. Eskom
While Eskom continues to raise electricity prices—recently by over 12.5% for municipal electricity and with a proposed 36% increase for next year—solar technology costs have been steadily declining. Energy consumers can now procure solar energy through power purchase agreements at rates as low as 95c per kWh, significantly undercutting Eskom’s current tariffs which can reach up to R3 per kWh.
Future Outlook for Solar Energy
Despite the recent reduction in loadshedding incidents, Sacks remains optimistic about the future of solar energy in South Africa. He asserts that the cost benefits of solar will continue to drive adoption across the market, offering consumers a cheaper, fixed, and predictable energy solution over the long term. Moreover, solar producers are leveraging electricity arbitrage strategies, storing solar energy in batteries to use during peak demand periods, further enhancing the attractiveness of solar power.
In conclusion, while loadshedding did not create the business case for solar, it has accelerated decision-making among energy consumers, highlighting solar energy’s resilience and value proposition in South Africa’s evolving energy landscape.
