Weekend Argus (Saturday Edition)
Solar remains too costly for many
MUCH of the South African population remains unserved by solar because of the cost barrier to entry, according to the latest research data by ooba Solar.
While residential solar installation rates have increased at an exponential rate since 2021, said Dominique dHotman, the head of ooba Solar, the platform's latest research shows that about 45% of households would remain unserved by rooftop solar solutions because “the cost of these systems would remain out of reach, even with the latest finance options”.
This comes as no surprise because the average medium-sized solar system is priced at just over R200 000.
dHotman said the findings point to the fact that there was no solar offering available on the market, be it size or price point, to meet the segment's needs.
Solar is one of the green options taking centre stage worldwide but not at the rate we would expect.
While the push to reduce reliance on fossil fuels and move towards renewable energy sources has grown and led to trillions being invested in enhancing solar power generation capacity worldwide (see graphic), residential use of solar energy globally remains limited.
China's solar prowess is leading the way. With a whopping 430GW solar capacity as of April this year, the country is the largest producer of solar energy in the world. Others lag behind.
In Germany, the residential adoption rate stands at about 11% and in the UK, around 4%. In North America, the US lags behind with a mere 3% and Australia has emerged as a global leader, with a 31% adoption rate – more than double the 2018 rate of 14%.
“South Africa is still a relatively small solar player, with an estimated residential adoption rate of 3.54%,” said dHotman.
“However, we are one of 40 countries … with a cumulative photovoltaic (PV) capacity of more than one gigawatt, a status enhanced by our naturally sunny climate.”
To better understand the residential solar penetration rate in South Africa, dHotman and the ooba Solar team analysed the estimated market potential of the residential roof top solar installations by major providers against Deeds Office data of residential properties. ooba Solar is a platform that provides consumers with solar installation quotes for comparison and assists them in securing financing for their solar projects.
The resulting figures are informed estimates but they provide insight into the size of the residential solar market and which system sizes are most popular among South African homeowners.
Provinces with the lowest and highest solar adoption rate
When it comes to which region leads the way in solar market potential, it is no surprise that South Africa's most populous province, Gauteng, comes out on top, with an estimated market share of 45.8%. The Western Cape comes in second, with an estimated 24%, followed by KwaZulu-Natal with 12.6%.
“Gauteng residents have experienced some of the worst blackouts in the country, not only as a result of ongoing load shedding but also due to poor service delivery, resulting in many homeowners having no choice but to go off-grid,” said dHotman.
The Northern Cape has the smallest projected solar market share in South Africa, at 1.4%, making it the least likely to invest in renewable energy.
The North West comprises only 2.5% of the country's estimated solar market share, followed by Limpopo with a mere 1.9%.
Solar penetration rate across price bands
When compiling the data, dHotman and his team classified the various solar offerings into three categories: small, medium and large. While the product specifications differ across providers, the rough definition is:
Small: 3kW inverter, 5kWh battery, 2.7kWP (six panels).
Medium: 5kW inverter, 5kWh battery, 3.6kWP (eight panels). Large: 8kW inverter, 10kWh battery, 6.3kWP (10 panels).
“The data indicates that ‘medium' systems are by far the most popular, comprising over 50% of installed solar systems in the country,” said dHotman. Small systems make up 35%, with large systems at 14.3%.
“With the average medium system priced at just over R200 000, it's clear that South Africans are willing to spend more to ensure increased solar resilience.”
Full-title homeowners more likely to invest in solar
The ooba Solar data gives additional insight into solar preferences across full and sectional title homeowners, with the data indicating that those with free-standing homes are more likely to invest in solar.
“An estimated 68.7% of all residential solar systems in South Africa are located in full title homes – a staggering majority that may be the result of body corporate rules around upgrades and additions to sectional title properties,” said dHotman.
“Here too, medium-sized solar systems are the most popular among both property types, comprising 50% of total solar systems for both sectional and full title homes.”
Much of the remains unserved
population
While residential solar installation rates have increased at an exponential rate since 2021, ooba Solar research shows that an estimated 45% of households would remain unserved by roof top solar solutions because the cost of the systems would remain out of reach, even with the latest finance options.
“This points to need for other energy sources such as gas being more accessible and the need for further innovation in the solar solutions available to this part of the market and also to the need for additional financial products to be brought to the market to serve these households,” said dHotman.
“This means that there is not currently a solar offering available on the market, be it in size or price point, to meet this segment's needs,” he said.