The South African Photovoltaic Industry Association (SAPVIA) has said that electricity demand in 2024 and 2025 is projected to grow at one of the highest rates seen in the last two decades.

According to a recent International Energy Agency (IEA) report, the solar photovoltaic (PV) energy will contribute significantly to meeting this demand, accounting for half of the projected increase in electricity consumption.

SAPVIA chief executive Rethabile Melamu explained that the report attributed this surge in electricity demand to various factors such as robust economic growth, extreme heatwaves, and the growing use of electricity-dependent technologies, including electric vehicles (EVs) and heat pumps.

“At the same time, renewables continue their rapid ascent, with solar PV on course to set new records. This is a positive prediction for the future for members of our industry here at home as well,” Melamu said, as reported by Engineering News on November 29.

Solar outlook

The IEA predicts that by 2025, electricity generation from renewable energy sources will surpass that of coal for the first time globally. Solar photovoltaic (PV) is expected to play a significant role, accounting for approximately half of the anticipated growth in global electricity demand in 2024 and 2025. Combined, solar and wind energy are forecast to meet up to three-quarters of this increase in demand.

“It’s encouraging to see clean energy’s share of the electricity mix continuing to rise, but this needs to happen at a much faster rate to meet international energy and climate goals,” said IEA director of energy markets and security Keisuke Sadamori.

“At the same time, it’s crucial to expand and reinforce grids to provide citizens with secure and reliable electricity supply – and to implement higher energy efficiency standards to reduce the impacts of increased cooling demand on power systems,” he added.

According to SAPVIA, the recent ‘Global Market Outlook for Solar 2024 – 2028’ report paints a positive picture for the future of the solar industry. “We will see the climate emergency continuing to capture governments’ attention and energy security remaining the new compelling argument to invest in solar power in a quickly fragmenting world order,” Melamu was quoted by Engineering News as saying.

The latest solar outlook report, featuring recommendations from the Global Solar Council (GSC), emphasises the need for countries to set ambitious solar targets and boost investments in battery storage, grid infrastructure, and electrification.

South Africa

In South Africa, solar energy is on a strong growth path despite a decrease in installations compared to 2023, SAPVIA says. South Africa added 961 MW of solar capacity in the first 10 months of 2024, down from 2,430 MW during the same period in 2023. All 2024 installations so far stem from private-sector projects, as no publicly procured solar plants have operated since 2019.

However, the country’s installed solar capacity is forecast to rise from 6.68 GW in 2024 to 11.03 GW by 2029, driven by demand for cleaner energy solutions. According to SAPVIA’s data, 495 MW of utility-scale public projects are under construction, with 375 MW expected online in 2024 and 120 MW by 2026. An additional 880 MW is in advanced development, set for construction in 2025, as reported by pv magazine.

Projects from earlier Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) bid windows are anticipated to come online, adding 1.8 GW to the grid by 2028.

SAPVIA forecasts 8%-15% quarterly growth over the next two years for the commercial and industrial (C&I) small-scale solar market (30 kW to 1 MW). Similar growth is predicted for the utility-scale segment, based on private-sector registration trends.

However, the association noted a 24% decline in large-scale C&I installations (1 MW to 50 MW) from Q4, 2023 to Q3, 2024 owing to increased market competition and suspended power outages, or load shedding.

“One possible reason for the decline in 2024 is the emergence of new aggregators and traders, resulting in increased competition on the supply side,” SAPVIA told pv magazine. “This coupled with the suspension of load shedding since March 2024 has made bi-lateral power purchase agreements a viable option for larger C&I users.”

Residential solar demand has dropped by 60-80% compared to 2023, owing to the stabilised power supply, which reduced the need for solar-plus-battery setups. Nevertheless, SAPVIA predicts residential demand will rebound following economic incentives currently under discussion.

Future growth

Additional solar generation capacity in 2025, according to SAPVIA, is expected from private-sector initiatives and government programmes, such as expanding PV-related personal income tax benefits, reforming the energy bounce-back scheme to assist middle-income households and introducing competitive energy feed-in credit schemes. These measures are anticipated to stabilise residential market growth in 2025 and 2026.

Furthermore, efforts to reduce the country’s dependence on coal for electricity generation are projected to attract ongoing investment in solar, contributing to South Africa’s decarbonisation and economic opportunities. Innovations in solar PV technology and new project developments are also facilitating the expansion of the solar sector.

“The solar energy sector in South Africa is poised for significant growth, with strong support from both the government and private sector, making it an exciting space to watch in the coming year,” Melamu said.