The Photovoltaic (PV) market in South Africa has been growing at a much slower pace than its international counterparts. The market is currently in a waiting phase for the REFIT program to be implemented. Until this occurs, PV usage in the South African market will be limited primarily to off-grid applications, such as rural electrification, road signage, isolated farms and lodges and telecommunications.

New analysis from Frost & Sullivan, ‘The South African Solar Photovoltaic Market’, finds that the market earned revenues of US$21.6 million in 2010 and estimates this to reach US$29.8 million in 2014.

“The price of PV modules is falling amid rising electricity tariffs,” notes Frost & Sullivan’s EPS Research Analyst Dominic Goncalves. “The payback period is decreasing and PV technology is edging closer towards grid parity.”

Key growth applications for the PV market in South Africa are currently off-grid applications such as telecommunications, isolated game farms and lodges, rural electrification, navigational buoys, water pumps, and nascent niche markets such as street lighting, billboard illumination and road signage. Currently, interest is arising from the commercial sector, where large corporate companies are installing PV to showcase their green credits.

The PV market in South Africa is reliant on the implementation of the REFIT program as well as the proposed Upington Solar Park. Either of these two growth drivers would promote exponential growth for the South African PV market.

PV continues to face significant competition from other renewable energy technologies in South Africa, such as solar water heaters, Concentrated Solar Power (CSP), and wind energy. Proposed feed-in tariffs for CSP and wind are considerably lower than PV, particularly for large-scale PV development.

However, recent allocations within the Integrated Resource Plan (IRP), the nation’s 20-year master energy plan, set aside some 8,400 MW of solar PV to be deployed in South Africa by 2030. The framework allows for 300 MW of large-scale PV per year to be rolled out from 2012 onwards.

For small-scale and residential uses, solar water heating proves to be a more attractive economic option than PV during the period 2011-2014. The support that this adjacent technology is receiving from government usurps potential growth from the small-scale PV market.

“Solar PV is presently not an attractive economic option for residential applications in South Africa,” remarks Goncalves. “Solar water heaters appear a beneficial option for the consumer; currently, they represent a more viable way to reduce electricity bills and thus the strain on the national energy grid, while lessening the impact of carbon emissions.”

Although the manufacturing base for PV in South Africa is currently low, manufacturers are able to produce PV modules at prices that are competitive with their European and Asian counterparts. As economies of scale will reduce costs even further, significant opportunities exist for manufacturers to set up PV manufacturing facilities in South Africa.

“Market players are awaiting the potential development of the solar park concept in Upington, and the framework for the first PPAs to be signed,” concludes Goncalves. “Once this happens, a component manufacturing hub for PV would be set up for mass-scale production.”

The current allocations for PV within the Policy Adjusted IRP are promising. The first PPAs are expected to be signed before the COP17 in October this year. Once this framework is facilitated, project developers can set about to install large-scale PV plants that will be fed into the grid to produce clean energy in South Africa on a grand scale.”

Further Information: Frost & Sullivan (www.energy.frost.com)