Not so quiet revolution

FOR SEVERAL YEARS, the roll-out of rooftop solar, batteries and inverters has been referred to as South Africa’s quiet revolution.

While Eskom struggled to keep the lights on and government battled to re-establish a regular public procurement rhythm following the State-capture-linked disruption of what was, until 2014, as successful renewables programme, many South African businesses and households began taking matters into their own hands.

Without fanfare, solar panels became an increasingly common sight on factory and shopping centre roofs, as well as shaded parking areas and urban homes. These installations were typically coupled to the batteries and inverters that offered the owner or renter the security of supply they were no longer receiving from Eskom or their municipality.

True, the distribution is highly uneven, with the majority of South Africans simply unable to afford the upfront costs of such systems, which have enjoyed relatively parsimonious and shortlived government support.

Yet, for many businesses, the investment still made sense. It ensured undisrupted trading despite almost daily loadshedding, and it could eventually restore some certainty to their electricity accounts in a context of a tariff trajectory that was far exceeding inflation. Likewise for those households with the means, the installations were pursued primarily for the peace of mind that accompanied uninterrupted electricity supply, with electricity-bill savings a secondary, albeit not immaterial, consideration.

The net result has been a steady rise in investment, as well as in solar panel, battery and inverter imports.

The quiet revolution has gained volume, however, following belated government reforms opening the way for far bigger installations.

That ramping up is evident in a recent analysis shared by Gaylor Montmasson-Clair, who is Trade & Industrial Policy Strategies senior economist and South African Renewable Energy Masterplan facilitator.

It shows that South African imports of solar panels, lithium-ion batteries and inverters climbed to a record $3.8-billion last year, or about R70-billion, double the $1.7-billion of 2022. The surge lifted the overall value of the three energy components imported over the ten years from 2014 to 2023 to above $10-billion.

Montmasson-Clair described panel imports of $947-million, or R17.5-billion, as “mind boggling”, with about 5 GW worth of panels imported, up from 1.3 GW in 2022. The value of lithium-ion battery imports, meanwhile, reached $1.75-billion last year, more than double the $730-million recorded in the prior year.

It will be important to track developments, given the slightly more benign loadshedding outlook and the removal of a National Treasury tax incentive. However, domestic demand is unlikely to fall dramatically even if household and commercial installations level off.

Demand will be supported by various utility-scale private projects that have either achieved financial close or are close to doing so, while public procurement activity is picking up pace again, with the seventh renewables bid window currently open and the eighth to be launched soon.

Given this firmer underpin, the potential for green industrialisation is arguably better than it has been for many a year.