Changes coming for inverters, batteries and solar in South Africa
Over the past several years, the prevalence of households and businesses investing in renewable energy solutions in South Africa has skyrocketed – and the Competition Commission has taken note and suggested some policy changes for the sector.
Despite the recent reduction in the prevalence and severity of load shedding, policy developments both domestically and globally underpin that the renewables sector is here to stay.
Noticing this shift, the Competition Commission conducted a survey on the state of competition and the use of solar PV panels, inverters, and storage batteries by households and businesses across metros in South Africa.
“The increasing demand by households and businesses for renewable energy products in South Africa requires policymakers and regulators to facilitate policy interventions that can address their energy access needs,” said policy analysts at the Commission Sithabise Buthelezi and Engetelani Ndobela at an information session on 28 August.
Among other findings, the Commission saw that while access has somewhat improved, the barriers for households and businesses in South Africa attempting to procure renewable energy products remain very prevalent.
The survey identified several key issues, and the Commission provided some policy suggestions for the Department of Trade, Industry and Competition (DTIC) to address them – including a push for the standardisation of equipment quality and the mandatory certification of installers to protect consumers.
According to the survey, some of the identified woes and suggested policy interventions include the following:
| Issue | Suggested policy actions | |
| Market access | Majority of the renewable products are manufactured overseas and imported. | – Promote localisation and incentivise the growth of local manufacturing capacity of renewables through funding initiatives. – Promote investment in local manufacturing capacity by diverse investors, including micro-lenders and consumers. |
| Affordability | Although prices have come down over the past several decades, the cost of procuring renewable energy products remains high. This means that these products remain out of reach for most lower-income households and small businesses. | – Facilitate financial mechanisms aimed at lowering the economic barriers for lower-income households and small businesses, expanding access to renewable energy solutions. – Investigate potential excessive pricing and collusion among competing suppliers. |
| Standards | There is a lack of concrete standards set out for these products to ensure that they are fit for purpose. | – Establish mandatory certification of installers and product quality standards to ensure the products are fit for purpose. |
| Lack of consumer education | Many consumers are unaware of where the product comes from, as well as a lack of knowledge in terms of their rights as consumers, particularly when choosing installers. | – Promote consumer awareness to buy local and questions they should ask when making purchasing decisions. Consumers have the right to choose the supplier/installer of the products without automatically cancelling the product warranty. – Financial institutions should allow for increased choice in the selection of the installer when the products are financed. |
Additionally, the Energy One Stop Shop, a presidential initiative established within the DTIC, said that bottlenecks when attempting to get authorisation is inhibiting its expansion; although these are being addressed.
“Getting through bureaucracy and red tape remains one of our biggest challenges,” said Lester Bouah, Chief Director of InvestSA, whose department works with other government entities to accelerate applications and authorisations as well as streamline processes.
Does the end of load shedding mean the end of renewables?
Focusing on the increase in demand, the Commission found that the procurement of renewable energy products in South Africa increased from 2021 to 2023, with inverters and storage batteries being the most sought-after products.
This can be attributed to the intensity of load shedding and the potential ease of sourcing the products.
With load shedding suspended for over 150 days, the surge in renewable energy investments is expected to wane.
However, the experts at the launch outlined that both domestic and global policy developments continue to support the growth of renewable energy.
South Africa’s energy action plan places a major emphasis on renewables, seen through its priorities of boosting private investment in generation capacity, expediting the procurement of new renewable, gas, and battery storage sources, encouraging rooftop solar investments, and fundamentally transforming the electricity sector (moving away from fossil fuels).
Additionally, South Africa is a signatory of the Paris Accord, which commits the country to moving towards net zero by 2050. This has materialised in the country’s legal system through elements like the recent accent of the Climate Change Act.
“If we don’t move towards a very low-carbon intensive economy in South Africa, we really are going to face significant problems,” said Gerhard Fourie, chief director of Green Industries at the DTIC.
Fourie noted that risks include becoming less attractive to investors, as many trading partners seek products with a low-carbon footprint.
This shift is reflected in the introduction of carbon taxes by numerous countries, including that of South Africa.
Fourie said that stable demand is a fundamental prerequisite for any industrial development strategy.
When asked whether the decrease in load shedding will greatly impact stable demand, he cited policy developments that is likely to keep it up.
“Big industries in South Africa in particular are realising that in order for them to remain competitive amid these recent developments, they have to lessen their carbon intensiveness,” Fourie said.
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