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Solar power in South Africa

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Khi Solar One concentrated solar power plant

Solar power in South Africa includes photovoltaics (PV) as well as concentrated solar power (CSP). As of July 2024, South Africa had 2,287 MW of installed utility-scale PV solar power capacity in its grid, in addition to 5,791 MW of rooftop solar and 500 MW of CSP.[1] Installed capacity is expected to reach 8,400 MW by 2030.[2]

Solar potential of South Africa

Government programs

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As of 1 January 2016 the South African government gave a tax incentive through the South African Revenue Service for the installation of photovoltaic solar energy generation systems. Depending on the size defined in MWp (Megawatt peak) of the photovoltaic solar system, the amended section 12 B of the Income Tax Act No. 58 of 1962 stipulates the size of the tax shield available through accelerated depreciation to the commercial tax paying entity.[3][4]

Photovoltaic solar systems smaller or equal to 1 MWp can be depreciated in one year, granting the commercial tax paying entity a 28% discount on the system. The tax shield applies even if the photovoltaic solar system is installed mid-year[5] or if the system is not new.[6] A repayment time of one year and ongoing electricity savings for the remainder of the system's lifetime can be achieved by financing a portion of the cost of the system.[7] Photovoltaic solar systems greater than 1 MWp are depreciated with the schedule 50%, 30%, and 20% in the first 3 years respectively.

Adoption and government conflict of interest

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Despite this aggressive tax incentive, South African companies are slow to adopt grid-connected photovoltaic solar systems due to the lack of public dialogue from the government concerning photovoltaic solar energy.

The lack of public dialog is partially due to the conflict that arises between the government-owned utility, Eskom, the local renewable energy sector, and international obligations such as the Kyoto Protocol and the Paris Agreement. The state-owned electricity utility Eskom that provides 90%[8] (85%[9] from coal) of South Africa's electricity and depends on electricity sales to function. Due to alleged corruption and mismanagement of funds in the years leading up to 2017,[10][11] Eskom has been forced to increase tariffs by 340% over 10 years.[12] Despite this tariff increase Eskom is in poor financial health as of 2017. The utility has stated that the increase in renewable energy generation directly impacts its revenue stream, which makes it difficult for it to meet its debt obligations. A government bailout has not been ruled out. The utility, relying mainly on coal-fired power stations also fears that renewable energy generation will directly impact coal jobs.[13]

Through its holding in Eskom, the South African government is dependent on Eskom's revenue stream to avoid a bailout with public funds.[14][clarification needed]

Worsening rolling blackouts have prompted solar company Scatec to explore bypassing Eskom and selling directly to industrial customers.[15]

Municipal programs

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In addition to the government tax incentive for photovoltaic solar energy generation, certain municipalities have further incentives for residential and commercial customers, such as a feed-in tariff or net metering.

Incentive Programs in Metropolitan Municipalities
Metropolitan Municipality Seat Type Notes Link
City of Johannesburg Johannesburg Feed-in tariff Embedded Generation ≤1 MW
Residential: R0.4279/kWh
Commercial: R0.3614/kWh 		City Power
City of Cape Town Cape Town Feed-in tariff Small-scale Embedded Generation ≤1 MW
Residential: R0.7008/kWh
Commercial: R0.7008/kWh 		City of Cape Town
Tariffs 2016/2017
eThekwini Durban Feed-in tariff Residential Embedded Generation
Single Phase: ≤2.6 kW
Three Phase: ≤13.8 kW
Residential: R0.68/kWh 		Ethekwini Municipality
Tariffs 2016/2017
Ekurhuleni Germiston n/a City of Ekhuruleni
Tshwane Pretoria n/a City of Tshwane
Nelson Mandela Bay Port Elizabeth Net metering Small-scale Embedded Generation ≤1 MW
Residential: 100% of electricity cost
Minimum cost: R0.00
Up to 1 year credit when monthly generation exceeds consumption 		Nelson Mandela Bay SSEG Application
Net Metering Information
Policy Explanation
Buffalo City East London n/a Buffalo City Metropolitan Municipality Tariffs
Mangaung Bloemfontein n/a Mangaung Metropolitan Municipality

Operational and projected plants

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Bird's eye view of Khi Solar One (October 2016). Focusing light above the tower
See also: South African solar PV stations and South African CSP stations

The 50 MW Touwsrivier CPV Solar Project concentrated photovoltaics (CPV) power plant was constructed in Touwsrivier, in Western Cape,[2] South Africa[16] in December 2014.[17] A 75 MW solar power plant started production on September 13, 2013 in Kalkbult, in the Northern Cape (implemented by Scatec). Two other PV plants were completed by the same company in 2014. These are located at Linde in the Northern Cape and Dreunberg in the Eastern Cape, both sun drenched regions boasting some of the best conditions for solar power in the world. Altogether, these 3 plants provide power for around 90,000 South African households.

Sonnedix and Juwi have announced that they will construct an 86 MW solar photovoltaic (PV) plant in the Northern Cape province. The Mulilo Sonnedix plant in Prieska plant will be larger than any PV plant currently on line in the African continent, and was awarded through the third round of the South Africa's Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). Financial close on the project is targeted for July 2014, with commissioning planned for the second half of 2016.

Iberdrola completed the Jasper Solar Energy Project solar photovoltaic (PV) power plant at 96 MW. It was carried out in a desert area with extreme temperatures and involved the installation of over 325,000 PV modules. This PV plant is located in Northern Cape province in a remote, semi-desert location. It covers a surface area equivalent to 205 football pitches.

Acciona has put the Sishen solar photovoltaic (PV) plant into service in December 2014. It has a peak capacity of 94.3 megawatts (MWp) – 74 nominal MW – and is located in Dibeng in the Northern Cape province. Its horizontal tracking structures allow the PV panels to capture more radiation by following the sun's trajectory across the sky. The plant will produce electricity equivalent to the consumption of around 100,000 South African households, or around 420,000 people (2011 South African household size = 3.6 persons).

As of January 2015 a total of 593 MW produced from PV plants were connected to the grid.[18]

A consortium led by ACWA Power International (Saudi Arabia) has completed commissioning of a 50 MW concentrating solar power (CSP) project in South Africa's Northern Cape in Dec-2015. The Bokpoort CSP project includes 9.3 hours of thermal energy storage, which will allow it to meet demand during peak hours between 5 and 9 PM. ACWA describes this system as the largest thermal storage system ever built for a CSP plant of its size and capacity. The South African solar power plant has set a new African record (26 April 2016) for the continuous, round the clock supply of electricity.[19]

Two CSP plants are being built by Abengoa in the Northern Cape. Khi Solar One is a Solar Tower plant of 50 MW capacity near Upington and Kaxu Solar One is a Parabolic Trough plant of 100 MW capacity near Pofadder with storage capability for 3 hours. Xina Solar One has a total installed capacity of 100 MW, also near Pofadder.[20]

TotalEnergies is currently planning to construct a 216 MW solar plant which would include a 500 MWh battery storage system, both of which are due to be completed in 2025.[21]

Solar thermal energy

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See also: Solar thermal energy

As of 2021, the cumulative installed capacity of solar thermal collectors in South Africa reached 1,844 MW, or 2.62 Mm2 (million m2) of sensor. From 2017–2021, this market continued to grow at a rate of around 2% per year.[22] While much of this capacity came from installations in homes and businesses, several major CSP plants have also been installed and connected to the South African grid.[23]

Residential solar PV

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South Africa has experienced an increase in the installation of solar PV since 1992. The low electricity tariffs offered by Eskom prior to 2010 has led to a recently rapid installation increase. The shift in installations can be seen across all segments of consumers including industrial, agricultural, commercial and residential. There are predictions that indicate that there would be a continuous decline in the cost of Solar PV well beyond 2020.[24]

The steady decline in solar PV and battery storage costs creates for an increasingly attractive business case to support self ownership with backup intervention and storage in the absence of grid-based power.  The statistics for the absorption of solar PV presently can barely be regarded as comprehensive or official considering the fact that they are based on industry estimates.[24]

Installation numbers remain unclear because of the absence of an official or effective Small-Scale Embedded Generation (SSEG2) registration process for low-voltage connected customers. Although the National Energy Regulator of South Africa (NERSA) confirmed that they will be initiating a formal national registration process for SSEG, chances are they may only be fully operational in the next 2 to 3 years.[timeframe?]

However, certain municipalities have initiated their own registration processes to allow connection to their distribution grid infrastructure. "The South African Department of Energy (DoE) has recently released Schedule 2 to the Electricity Act of 2006 which revised the licensing and registration requirements for categories of generators. In accordance with these new rules, generators smaller than 1MW are exempted from having to obtain a license but need to be registered with NERSA."[24]

An approximately 285MWP5 (DC) of small scale solar PV (rooftop and ground-mounted) was installed in South Africa as at December 2017 according to the data received from different sources. The total number of installations equates up to 139,556 units. The installation of small to medium scale solar PV leads to a market share percentage of 0.65% of the total national generation capacity of 44.134GW6. "In addition to these grid-based installations, there are 87,150 off-grid systems with a total installed capacity of 14.35MWP."[24]  

In 2022, South Africa's shift to solar power was marked by a 24% increase in small-scale solar generating capacity. This growth is evidenced by the import of solar PV panels worth 2.2 billion rand, adding over 500 megawatts of capacity in just the first five months. Predominantly, wealthier individuals have adopted this trend.[25]

Low and middle-income households have partially participated in the growing uptake of solar PV (SSEG) systems in South Africa for reasons pertaining to affordability and access to finance. Unlike most other countries where grid-connected solar PV technologies are released to low-income households mostly on full or partial subsidization, PV implementation initiatives of such kind in South Africa are targeted generally toward households lacking electricity.[26]

Middle-income households with average earnings of $351.52 to $703.04 per month have better purchasing power. "They generally have improved security of tenure and greater access to electricity".[26] Middle-income households consume twice as much electricity as low-income households. Although middle-income households earn more than twice the average monthly income of low-middle households, it would yet be difficult for the majority to qualify for the loan necessary to purchase a system.[26]

In 2014, a multinational company by the name JA Solar Holdings which is headquartered in Beijing, China began working with local construction companies in South Africa to provide small-scale rooftop Solar PV systems to the suburbs of several South African cities. These systems were installed on the roof of low-income households. With these JA Solar systems, the house dwellers were able to have access to free electricity from their roofs.[27]

Statistics

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PV installed capacity
Year Capacity (MW)p Production (GWh) Ref
Cumulative Added
2011 1 – –
2012 41 40 –
2013 262 222 67
2014 1063 801 1075 [28]
2015 1252 189 2136 [29][30]
2016 1974 722 2842 [31]
2017 2186 212 3095 [32]
2018 2559 372
2021 4172 1313
2022 6326 372 [33]
2023 6164 372 [33]
2024 8068 [1]
MWp: megawatt-peak, nominal capacity
PV installed capacity in South Africa (MW)[28]
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
CSP installed capacity
Year Capacity (MW)p Production (GWh) Ref
Cumulative Added
2015 100 100 188 [30]
2016 200 100 590 [31]
2017 300 100 676 [32]
2018 400 100 [32]
2022 500 [33]
2023 500 [33]
2024 500 [1]
MWp: megawatt-peak, nominal capacity

See also

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Wikimedia Commons has media related to Solar energy in South Africa.

References

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  1. ^ a b c "South Africa Now Has Over 12 Gigawatts of Wind & Solar Generation Capacity!". Retrieved 2024-07-30.
  2. ^ a b "Solar energy in South Africa - REVE". www.evwind.es. Retrieved 16 April 2018.
  3. ^ "Taxation in South Africa 2015/2016" (PDF). South African Revenue Service. 21 March 2021. p. 40.
  4. ^ "Powering up: A look at section 12B allowance for renewable energy machinery". South African Institute of Tax Professionals. Retrieved 31 August 2017.
  5. ^ "Tax Incentive Through Accelerated Depreciation On Solar PV – Section 12B". econavitas.
  6. ^ "2017 Market Intelligence Report" (PDF). GreenCape. pp. 42–43.
  7. ^ "Updated SARS Tax Incentive for Solar Power!". Grid Energy Solutions. 13 May 2024.
  8. ^ "Integrated Report". Eskom. 15 January 2021. p. 4.
  9. ^ "Integrated Report". Eskom. 15 January 2021. p. 57.
  10. ^ "Eskom auditors raise red flags over Koko, Molefe". Fin24. Retrieved 2017-09-01.
  11. ^ "Corruption charges laid against suspended Eskom CFO". Retrieved 2017-09-01.
  12. ^ "Tariff history". Eskom. 26 May 2021.
  13. ^ "Integrated Report". Eskom. 15 January 2021. p. 50.
  14. ^ "An Eskom bailout is on the way". Moneyweb. 2017-07-14. Retrieved 2017-09-01.
  15. ^ Norway's solar firm Scatec aims to sell power directly to SA buyers
  16. ^ "Soitec funded for 50 MW solar power plant in South Africa". electronicsweekly.com. 13 February 2012. Retrieved 16 April 2018.
  17. ^ "Projects: Touwsrivier". cpvconsortium.org. Retrieved 2018-12-22.
  18. ^ Mojanaga, Lebogang (2015-01-13). "Department of Energy, Energy Programmes and Projects Electricity Infrastructure/ Industry Transformation" (PDF).
  19. ^ ACWA Power (26 Apr 2016). "Bokpoort Generation Record".
  20. ^ "Massive clean green electricity plant to be officially launched in Northern Cape this month". News24. Retrieved 2018-05-07.
  21. ^ Banya, Nelson (2023-12-15). "TotalEnergies to start building 216 MW solar plant in S.Africa". Reuters.
  22. ^ "Spotlight on the South African solar thermal market". Solarthermalworld. 2024-02-23. Retrieved 2024-02-23.
  23. ^ "Five Biggest CSP Plants in South Africa". Energy Capital & Power. 2022-07-07.
  24. ^ a b c d "Trends and statistics of Solar PV Distributed Generation in South Africa" (PDF). Research Space. 2019.
  25. ^ "Focus: South Africa's 'silent revolution' as those with cash go solar". Reuters. 2022-08-15.
  26. ^ a b c "Low and middle income grid connected solar PV approaches in South Africa:Discussion Paper" (PDF). City Energy.
  27. ^ Reporter, Creamer Media. "JA Solar strategy in Africa". www.engineeringnews.co.za. Retrieved 2020-08-02.
  28. ^ a b "Snapshot of Global PV 1992-2014" (PDF). www.iea-pvps.org. International Energy Agency — Photovoltaic Power Systems Programme. 30 March 2015. Archived from the original on 7 April 2015.
  29. ^ "2015 SNAPSHOT OF GLOBAL PHOTOVOLTAIC MARKETS" (PDF).
  30. ^ a b "NERSA". www.nersa.org.za. Retrieved 2016-06-27.
  31. ^ a b "Monitoring of Renewable Energy Performance 2016". www.nersa.org.za. Retrieved 2017-06-03.
  32. ^ a b c "2017 MONITORING RENEWABLE ENERGY PERFORMANCE OF POWER PLANTS" (PDF). www.nersa.org.za. Retrieved 2018-07-15.
  33. ^ a b c d "Total solar energy capacity in South Africa from 2013 to 2023". Retrieved 2024-07-30.
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