The size of the solar energy market in South Africa is estimated to increase by 23.31 terawatt-hour units from 2021 to 2026. The market’s growth momentum will accelerate at a CAGR of 29.74% says the report “South Africa-Solar Energy Market by Application and End-user- Forecast and Analysis 2023-2027” by Technavio. Sunny climatic conditions are driving the market growth. South Africa is located in a latitude zone with higher solar radiation than other regions or countries.
Government policies and high investments in solar PV projects are expected to increase the installed solar PV capacity of the country in the coming years. Such factors are expected to impact market growth during the forecast period positively. However, the high initial investment and maintenance costs for solar PV systems are challenging market growth.
The generation of solar energy requires a large area for solar panels. The efficiency of solar panels can reduce due to intermittency problems, which increases the initial investment and maintenance costs. This, in turn, leads to a significant burden on household users, which limits the use of solar panels and solar cover glass for residential purposes. Such factors are expected to hinder the solar energy market growth in South Africa during the forecast period.
The solar energy market in South Africa is fragmented, with the presence of numerous international and regional players. A few prominent vendors in the market are ARTsolar Pty Ltd., Canadian Solar Inc., Enel SPA, ENGIE SA, IBC Solar AG, JinkoSolar Holding Co. Ltd., Renenergy South Africa Pty Ltd., Jiangsu Seraphim Solar System Co. Ltd., SunPower Corp., and Trina Solar Co. Ltd.
The competition among vendors is moderate, and their growth is dependent on R&D and innovations. Frequent changes in government policies, continuous developments in technology, and environmental regulations are driving the growth of the solar market in South Africa. The declining prices of solar PV systems and stringent regulations related to carbon emissions will further attract investors.
The utility segment will account for a significant share of the market growth during the forecast period. A large number of installations of large-scale solar power plants for the generation of clean energy and reduction of carbon emissions is driving the growth of this segment. The energy can also be stored in energy storage systems when there is no sunlight. Such factors will increase the adoption of utility-scale solar power in South Africa during the forecast period.
Scaling up renewables in transport will be a key trend in the solar energy market in South Africa. The country is focusing on carbon emission reduction and renewable energy to fulfil its energy requirements.