Solar Panel Imports to South Africa Take a Dive in 2024 Despite Rising Electricity Prices

In an unforeseen shift, South African imports of solar panels have steeply declined in the first half of 2024, as shown by recent data obtained from Trade and Industrial Policy Strategies (TIPS). Gaylor Montmasson-Clair, a senior economist at TIPS, revealed a substantial drop to R2.2 billion from R12 billion in the same period last year, marking a significant contraction compared to previous years' records.

This decline comes as a surprise, especially since over the past eight years, the capacity of imported solar panels has collectively eclipsed the peak capacity of Eskom’s biggest and newest coal power stations, Medupi and Kusile, which have been fraught with delays and are yet to operate at their full 4,800MW each. These two stations have been a decade behind schedule, whereas solar panels have rapidly made their mark, with South Africa procuring about 10,000MW’s worth since 2017.

Despite the drop in the first half of 2024, Montmasson-Clair indicates that there has been an uptake in the demand again in the second quarter, coinciding with Eskom and municipal tariff hikes that were implemented in April and July 2024. These increases, along with the warnings about future rises in electricity prices, seem set to be a driving force for the demand for solar panels moving forward.

The Daily Maverick and industry experts have flagged rising electricity prices as an imminent concern, prompting more consideration of solar options. The empowerment of households and businesses through tax incentives in 2023 has evidently shown the potential for solar energy to alleviate some of Eskom's supply challenges. During South Africa's most severe year of load-shedding, the investment in solar energy has aided the national power utility by reducing the strain during sunny hours and conserving emergency resources for peak times.

Nonetheless, according to Montmasson-Clair, Africa remains behind the curve in the adoption of solar technology, with China’s export volumes indicating just a 4% take-up for the continent. Still, South Africa stood out, being the largest market for these imports in the first half of the year, with other significant imports by Egypt, Nigeria, and Morocco.

The sharp rise in 2023 corresponds with the nation's worst year of load-shedding to date. It highlights a societal shift towards independent power production, leveraging solar energy to ease the demand on Eskom's resources, which has played a crucial part in mitigating power outages.

The variable nature of solar power does not offer a complete solution to South Africa's energy woes, but with intelligent integration and storage solutions like backup batteries, it contributes significantly to energy availability during peak hours. This, in turn, reflects the broader transition towards renewable energy, which is likely to gain momentum as electricity tariffs climb and solar prices become an even more critical determinant of consumer demand.