The current situation of solar storage in South Africa is primarily influenced by two factors: frequent load shedding experienced across the country and the high cost of electricity from power distribution companies. These companies heavily rely on coal for electricity generation. These issues were discussed during the webinar on the topic “Solar + Storage Market in South Africa” conducted by SolarQuarter.
The solar PV market in South Africa is experiencing growth despite the increase in load shedding. People are becoming more knowledgeable about solar energy, which is driving this expansion. Particularly in the commercial and industrial sectors, there is a rising interest in energy storage due to the impact of load shedding on operational costs. However, relying entirely on storage for continuous power supply throughout the day is not financially feasible.
Christopher Ahlfeldt, the founder of Blue Horizon Energy Consulting Services, points out that nationwide load shedding is the primary factor influencing the current state of solar storage in South Africa. The country’s heavy reliance on coal for electricity production has resulted in expensive electricity costs from power distribution companies (discom electricity).
Kobus van Tonder, Technical Director at Eversolar, identifies the main challenge in South Africa as an increase in power shedding. Despite this, he remains optimistic about the positive prospects for solar PV adoption as people become more educated about solar energy. In response to the escalating load shedding, energy storage has emerged as a prominent topic in the Commercial and Industrial (C&I) sector. The reliance on diesel generators to cope with power shortages is impacting operating costs for companies. However, solely depending on storage for all energy needs is not a financially viable solution.
Consumers face the challenging task of determining the most effective utilization of energy storage, whether for one, two, or six hours daily. The government has demonstrated support for renewable energy sources and has called for targets to promote their usage. Nevertheless, the lack of funding is hindering many Independent Power Producer (IPP) projects, with limited government assistance provided.
Sakhile Ngcongwane, Product Development Specialist at SolarAfrica Energy, points out that customers are increasingly opting to purchase solar with storage to achieve greater energy self-sufficiency, motivated by the significant impact of load shedding on their lives. However, the higher cost of these assets presents a challenge in securing financing. The goal is to convey to customers that despite the initial expense, the long-term benefits make it a worthwhile investment.
The increased prices of solar energy with storage indeed create difficulties in obtaining financing, but there is still substantial funding available for renewable energy projects. Despite this, some investments face obstacles due to the mismatch between long-term Power Purchase Agreement (PPA) schemes and customer preferences. Nevertheless, the renewable energy industry continues to develop, encompassing financing and EPC (Engineering, Procurement, and Construction) services.
Southern Africa Cainmani’s regional director, Frank Spencer, has highlighted that there is sufficient funding available for projects. However, the real issue lies in the mismatch between long-term Power Purchase Agreement (PPA) initiatives and consumer preferences. Consumers are reluctant to bear the billing burden for such solutions over extended periods. Nevertheless, the EPC and financing aspects of the renewable energy industry are experiencing a boom, and investments in renewable energy are on the rise across all market categories.
To ensure grid integrity, the integration of storage and solar is crucial. By utilizing the conserved energy during periods when solar plants are not producing, the balance of the grid can be maintained. Lithium batteries, known for their controllability, are frequently utilized for behind-the-meter storage solutions.
Frank explains that solar power plants primarily generate energy during the day, which creates a potential conflict when their output diminishes. The key is to find ways to harness and store surplus solar energy to bridge the gap and support grid stability during non-productive periods.
Agreepa Neduvhuledza, Chief Executive Officer of Dzuvha Solar, TEFLA Group, highlights the market opportunity for solar energy systems with storage in South Africa. This opportunity arises due to the country’s persistent load-shedding problem and the declining costs of solar energy.
Brian Hosking, Vice President of Client Solutions at Odyssey Energy Solutions, emphasizes the benefits of installing lithium batteries behind the meter, particularly for control purposes. He underscores the importance of technology in the realm of solar storage.
To accelerate the adoption of solar and storage systems, collaboration is essential between developers, the government, and other stakeholders. Together, they can devise policies favorable for solar in terms of funding, legislation, and overall policy. Incentives, subsidies, feed-in tariffs, and effective grid connections can play a significant role in expediting the adoption of these systems.
Given the complexity of regulating storage integration, explicit criteria are being developed to ensure compliance and effective policing of the sector.
Agreepa emphasized the need for collaboration between developers, the government, and other stakeholders to establish favorable regulations for solar energy. He highlighted the importance of incentives and subsidies, which are recognized worldwide, such as feed-in tariffs and grants, to accelerate the adoption of solar energy.
Grid interconnection is another critical aspect discussed, as it facilitates the integration of solar and storage systems with the grid, enhancing their overall efficiency. The potential for solar and storage in the market structure and regulation is vast, and several policy instruments can be utilized to encourage the use of storage systems.
Significant progress has already been made, and now the focus is on finalizing policies and gathering feedback from the business community. As the power market evolves, South Africa’s storage landscape has been impacted, adapting to the changes and advancements in the industry.
Sakhile Ngcongwane, Product Development Specialist at SolarAfrica Energy, emphasizes that the current shift in the electricity market provides a rapid opportunity for the renewable and storage industry to participate in grid transitions.
Kobus van Tonder, Technical Director at Eversolar, points out the need for formal integration of storage with solar. The industry has responded positively to this, with recently published guidelines representing 25% of the total requirement to recharge batteries. Municipalities are enacting laws to support this integration, but its effectiveness depends on consumer and installer compliance during solar storage installations.
Frank Spencer highlights the challenges of creating storage behind the meter, citing energy arbitrage as a means to charge batteries during peak production and discharge them during peak consumption to improve power quality and increase voltage.
Sakhile Ngcongwane notes technical difficulties faced by businesses due to the required size of batteries for alerting the maximum demand.
Utilizing solar storage controllers and logic can optimize battery utilization during peak hours while considering load-shedding pricing variations and weather conditions. Distributed solar system controllers can efficiently manage energy use.
Brian Hosking, Vice President of Client Solutions at Odyssey Energy Solutions, mentions the use of controllers and logic for solar storage, addressing when batteries kick in during peak hours and comparing costs with diesel generators as a potential solution. A straightforward distributed solar controller that adapts to changes in load-shedding tariffs and environmental conditions would be beneficial.
Overall, South Africa presents growth opportunities for solar storage due to load-shedding challenges and falling solar prices. However, further market penetration and successful grid integration require cooperation, supportive regulations, and technological advancements.