South Africa’s Solar Market Outlook: A Bright Future for Renewable Energy and Economic Recovery

South Africa has abundant solar resources, making it a prime location for the development of solar energy projects. The country has set a target of generating 18 GW of renewable energy by 2030, with solar energy expected to make up a significant portion of this target. The government’s Renewable Energy Independent Power Producer Procurement (REIPPP) program has been successful in attracting investment and supporting the development of solar energy projects in the country.

The REIPPP launched Bid Window six in April 2022. This goal is to bring an additional 2,600 MW into our energy mix. Meanwhile, the National Energy Regulator of South Africa, NERSA, has approved over 15 IPPs in May 2022 and June 2022.

Draft Amendments To The Electricity Regulation, Act 4 of 2006 (ERA) –On September 2, 2022, the Minister of Mineral Resources and Energy released draft amendments to Schedule 2 of the Electricity Regulation (Act 4 of 2006, ERA). The principal change proposed is to remove the 100 MW licensing threshold. This exemption exempts generation facilities, including those with energy storage, of unrestricted power with a point for connection on the distribution or transmission power system, and thus, the need to obtain licenses. Shortly after the licensing threshold was raised from 1 MW to 100MW on August 12, 2021, the proposed amendment to remove it was considered. This is the South African government’s attempt at encouraging further growth and investment within the energy sector, as well as promoting the further generation and reliable electricity supplies. This will help South Africa to address its energy crisis and provide much-needed relief for the economy after years of load-shedding.

Over the last three weeks of June-July 2022, South Africa was left without power for as long as eight hours per day, which has had a devastating effect on the already fragile economy. The crisis reached new heights with Stage 6 rolling blackouts, which were implemented after 18,000MW of generation capacity had been lost.