South Africa Distributed Solar Energy Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

South Africa distributed solar energy market is expected to grow at a CAGR of around 4.5% by 2026. With the COVID-19 outbreak, the sector had not witnessed any significant negative impact. In 2020, South Africa deployed 1 GW of solar PV projects. Though there was a slight delay in project execution, the sector managed to install distributed solar projects in several residential, and commercial places. Factors such as the supporting government policies such as Renewable Energy Independent Power Producer Procurement Programme is expected to drive the market. However, increasing adoption of alternate renewable technology such as wind and hydropower is expected to hinder the market growth during the study period.

- The commercial and industrial segment is expected to witness significant growth in the South Africa rooftop solar market over the forecast period.

- 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.

- The declining costs of solar photovoltaic (PV) modules is expected to drive the South Africa rooftop solar market during the forecast period.

Key Market Trends

Commercial and Industrial Segment to Witness Significant Growth

- The commercial and industrial sectors in South Africa is expected to witness significant growth in the solar rooftop market in the coming years owing to the affordability and need for the technology. The commercial and industrial sector generally incurs higher electricity costs for being the highest energy users. The sector also has the best use profiles and stands to gain considerably from installing rooftop solar PV in the large roof spaces.

- In 2018, Mall of Africa in South Africa inaugurated one of the largest rooftop solar photovoltaic (PV) systems in the country, with 4,755 kW installation covering most of the available mall roof space, an area of about 45,000 m², and the energy generated is used to power the mall’s daily operations.

- The GreenCape Smart Electricity project has focused efforts to create an enabling environment for rooftop PV and other small-scale embedded generation (SSEG) technologies in the Western Cape, which could lead to the installation of more than 200MW of rooftop installations in Western Cape in the coming years.

- Moreover, rooftop solar systems generate electricity during the daylight, coinciding with the peak hours of most factory operations. Hence, while the sun is out, manufacturing facilities have the option to either limit their dependence on the national grid or abandon it completely.

- Hence, the use of rooftop solar PV modules in the commercial and industrial segment is expected to grow faster during the forecast period.

Declining Costs of Solar PV to Drive the Market

- The South African small-scale embedded generation (SSEG) segment is dominated by rooftop solar PV owing to the competitive price, technical maturity, and ease of implementation of the technology.

- Solar PV costs in South Africa have fallen from an average of ZAR 3.3514 per kWh in 2011 to an average of ZAR 0.87 per kWh in 2019, which in turn is expected to provide a positive impact on the installation of solar rooftops in residential, commercial and industrial sectors.

- Furthermore, the rapidly rising of Eskom electricity prices has also created a sizeable demand for viable solar energy sources in the country owing to the declined cost of solar PV.

- South Africa solar PV installed capacity has reached 5490 MW in 2020 holding a growth rate of 24% when compared to the previous year installed capacity. Hence, an increase in installed solar energy capacity is likely to boost the target market.

Competitive Landscape

South Africa distributed solar energy market is moderately consolidated. Some of the major players in the market include GENERGY, Valsa Trading (Pty) Ltd, ASUNIM SOLAR SOUTH AFRICA (PTY) LTD, JA Solar Holdings, and Solar Energy Group (Pty) Ltd.

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• The market estimate (ME) sheet in Excel format
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