Solar Power Price Warning for South Africa

South African households and small businesses looking to buy solar and backup power products at the lowest possible prices might want to make their purchases within the next few months Solar Power Price Warning in South Africa.

According to the Energy Distributor

According to feedback from a major energy distributor, the large volumes of panels, inverters, and batteries that flooded the country are slowly trickling off supplier shelves. They expect that some of the stock will be replaced with new and more expensive products in early 2025.

Small Companies in 2022 and 2023

In addition, smaller companies that included solar installation services in their offerings due to the boom in requests in 2022 and 2023 are starting to return to their fundamental businesses. That move will decrease competition and allow more built-up installers to normalize their profit margins after they already had to make deep cuts to survive against an attack of short-lived disruptors.

In 2023, the value and volume of imports of solar energy products in South Africa reached record levels, however, encouraged by worst load shedding and tax incentives. With most of the addressable market having purchased their solar products by the end of last year and load-shedding being put off for half a year from early 2024, applications have declined.

Suppliers and installers are reducing the prices of solar energy 

Suppliers and installers are significantly reducing the prices of solar energy products to try and restore deals among new buyers and potential upgraders. Major energy products distributor Rubicon, known as the official supplier of Tesla energy products in South Africa, has told MyBroadband that the buying environment was perfect at the time.

Said Greg Blandford, managing director of Rubycon Energy

The biggest anomaly at the moment is that there is still a portion of residential stock with all suppliers in the market,” said Greg Blandford, managing chief of Rubycon Energy. If we can send a message to open people: This is a prime buying opportunity because this is possibly the lowest price point you’ll ever see.

Said  Blandford

Blandford said that current demand appears to be in line with growth in the years before the extraordinary boom in solar in 2022 and 2023. If you take out those two years and draw a straight line based on product demand year-on-year, you are probably sitting at the same growth curve as in previous years. 

He explained that this showed a type of market reset was in process, which could see a return to more price stability. In light of this, Blandford believes that solar power product prices should start ticking upward again by the middle of 2025. In addition to a more normal stream of imports, Blandford explained that several new and more advanced products would be launching in the new year, which could come with bigger price tags. Because the current price points are low, it just makes sense to buy now. By investing in solar, you are securing long-term cost savings for your home,” Blandford said.

Said AWPower managing director Christiaan Hattingh.

Cape Town-based solar power installer AWPower agreed with Rubicon’s market assessment. Once it normalizes and you start seeing new technology coming in, we’ll see a steady price increase again,” said AWPower managing director Christiaan Hattingh. The need to install solar power to protect against load-shedding might no longer be a factor, but there are two other important reasons self-generation will remain a benefit for households and businesses.

Electricity Minister Kgosientsho Ramokgopa warned 

Firstly, energy and Electricity Minister Kgosientsho Ramokgopa has warned that the next crisis for the power industry will be in local network distribution. Ramokgopa highlighted that underinvestment in municipal infrastructure is causing increased localized outages. Two metros encountering significant problems in maintaining their networks are the cities of Joburg and Tshwane.

Both have started executing significant amounts of localized load decrease in areas with high numbers of illegal connections. In the process, many families that pay for electricity have their power cut off during top request periods due to the illegal activities of their neighbors or nearby informal settlements.

Joburg started executing load-limiting

Joburg has also started executing load limiting in areas that are not prone to illegal connections but have not had their framework enough updated to keep up with property developments. Secondly, Eskom has asked for significant electricity tax climbs over the other three years, starting with a 36.15% climb in 2025.

Said Ramokgopa

Ramokgopa said that the government would be opposed to any increase over 20%. Even if the National Energy Controller of South Africa would only approve an increase of that kind, it would be over four times the expansion rate. The monthly charge of a solar system that can supply over 90% of a household’s request, combined with the cost of grid power for the remaining request, is already cheaper for many than having a grid-only supply. With the upcoming cost climbs, indeed family units with lower consumption may quickly see savings on their electricity bills while also being ensured against outages.

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