Government policy shifts and the declining cost of generating electricity from solar photovoltaic (PV) systems are credited for the global boom in the solar energy sector. Electricity generated by the sun became the fastest growing source of new energy in the world in 2016, according to the International Energy Agency.
 
“With the right policies in place, South Africa’s solar power market will be empowered to keep pace with this global trend,” says SOLA Future Energy CEO Dominic Wills, as the sector waits for an announcement on the government’s revised Integrated Resource Plan (IRP).
 
Energy Minister Jeff Radebe had previously said that his department wanted to finalise the document this month.
 
Policy certainty is key to unlocking the country’s energy potential, Wills says, adding that transparency and public engagement around the IRP are integral.
 
A 2017 report commissioned by the World Bank on the State of Electricity highlights the primacy of having the right policies and incentives in place. It found that “in many countries with low levels of electrification access, grid and off-grid solutions are vital for achieving universal electricity access, but they must be supported by an enabling environment”.
 
The IRP is South Africa’s electricity masterplan for the next two decades: it forecasts the country’s energy demands and determines how they should be met.
 
Crucially, the plan identifies where funds are to be invested, and the proposed growth in various energy sectors including coal, nuclear and renewables, Wills explains. “This is precisely why transparency and public engagement is so important in the development of the IRP.”
 
Outlining his expectations, Wills is hoping to see continued investment in the government’s Renewable Energy Independent Power Producer Procurement (REIPPP) programme as well as clear policies aimed at getting businesses to adopt clean energy solutions.
 
“The IRP will underpin the future of the REIPPP programme, but in addition, it will map out the allocation for embedded generation, which will give energy options for retail and industry.”
 
“We also want to see an end to the continued ambiguity around the government’s nuclear build programme,” he adds.
 
“Given the growth of the renewable energy market over the past five years, I’m excited to see how these developments fit into the state’s overall plan,” says Wills.
 
He explains that in 2013, businesses were wary about investing in solar energy even though it was predicted to become cheaper and more reliable than ever before.
 
“Now, the levelised cost of electricity (LCOE) for renewable energy is significantly cheaper than fossil-fuel generated power,” he adds.  
 
Looking ahead, industry experts predict that prices will drop even further, coupled with an already significant reduction in the price of lithium-ion battery systems, which dropped by 24% in 2017 alone. Currently, solar PV and battery storage systems are providing affordable and reliable electricity supply to businesses in both rural and urban contexts.
 
“Shopping centres are benefitting from the expansion of the rooftop solar PV market with clean, cheaper energy,” he points out, adding that “the government’s electricity masterplan must keep pace with these advances.”
 
“We think a mix of solar PV, wind and natural gas will play a critical role in the transition toward carbon-reducing energy solutions,” says Wills.
 
Cheaper than diesel, a hybrid model of solar and gas offers a viable alternative.
 
Although natural gas is a fossil fuel, the emissions are reportedly 50 to 60 percent[1] lower when combusted in a new, efficient natural gas power plant compared with emissions from a typical new coal plant.
 
“For too long coal has been the mainstay of the country’s electricity plan. We want to see a shift toward a sustainable energy mix that will take the economy forward,” Wills concludes.