New rooftop solar installations likely to drop by more than 50% in 2024

Last year was an “exceptional” year for renewable energy generation in SA. The worst year of load-shedding on record spurred many SA households and businesses to invest in alternative solutions that would make them at least partly independent of Eskom.

However, data for the first half of 2024 shows that installations of new rooftop solar systems and registration for new generation facilities have decreased markedly from 2023.

Still, SA was adding renewable energy much faster than in the years before 2023, which was probably an outlier year because of the unprecedented levels of load-shedding, said Andrew Middleton, CEO of GoSolr, one of SA’s largest residential solar companies.

Eskom has not had to implement load-shedding for more than four months thanks to the improved performance of its power stations.

A report released by GoSolr this week shows that SA homes and businesses have installed about 240MW of rooftop solar capacity in the first quarter of 2024 and 350MW in the second quarter, bringing the year’s total to about 590MW.

In 2023 about 2,630MW of rooftop solar was installed. Based on the present trend, total installations for 2024 will be down at least 50% compared with 2023.

The total installed rooftop solar capacity now sits at about 5,790MW.

The easing of electricity supply constraints had created an opportunity for the solar industry to differentiate the need for its product away from load-shedding, with the focus now shifting to cost savings, said Middleton.

“South Africans are feeling the pinch of rising electricity prices. While the growth of adoption of renewable energy was initially driven by load-shedding, we are seeing now that the focus is shifting towards cost savings as a driver, as solar and other renewable energy options become cheaper,” he said.

There has also been a decrease in 2024 in new renewable energy projects registered by  the National Energy Regulator SA (Nersa).

According to Nersa’s database, the total capacity of new generation facilities registered increased from 134MW in 2021, to 1,664MW in 2022, before jumping to 4,530MW in 2023.

Up to end-June 2024 the total new generation capacity registered was about 1,330MW compared with about 3,000MW registered over the same six months in 2023 — 2,500MW was registered in just the first quarter of 2023.

The renewable energy industry has warned that a lack of available electricity grid capacity and the slow progress Eskom is making in expanding the transmission grid risked stalling the renewable energy investment pipeline.

As previously reported in Business Day, the Energy Council of SA CEO James Mackay said a lack of grid access, which had already stopped the development of new renewable energy projects in some provinces during previous bidding rounds of the government-backed independent power producer project, could disrupt the flow of investment needed in SA’s electricity sector.

Speaking to Business Day, Biran Day, chairperson of the SA Independent Power Producer Association, said there was not a reluctance to invest in new renewable energy projects, but the lack of grid access posed a hurdle to investment.

“In the last year, Eskom built only about 74km of new transmission lines against a target of 166km. Eskom needs to build up to 1,400km per year to reach the 14,000km target in its 10-year transmission development plan, but the reality is that implementation has been shockingly slow,” said Day.

He added, however, that Eskom was now doing “outstanding work” — even it is five to 10 years late.

“They are doing outstanding work on prioritising the projects that will have the most impact. I think within the next two to three years we will see a massive change in the rate at which new transmission lines get built. But what happens in the interim is a massive problem,” said Day.

The only short-term solution, he said, would be to implement the curtailment regime Eskom had proposed.

Curtailment is the reduction of output from a renewable energy plant below what it could produce to respond to transmission capacity constraints. This allows more generation projects to connect to the grid.

To implement this, Eskom applied to Nersa earlier in 2024 to classify congestion curtailment as a constrained generation ancillary service. Nersa has not yet approved the application.

Eskom indicated in an addendum to its 2025 Generation Connection Capacity Assessment (GCCA), that introducing a 10% curtailment measure would allow for 3,470MW of new wind power projects to be connected to the grid in the most favourable areas for wind generation such as the Eastern Cape and Western Cape where there was now no capacity.

erasmusd@businesslive.co.za