The South America solar photovoltaic market size is projected to expand at a CAGR of 10% during the forecast period, 2021-2028. The growth of the market is attributed to rising demand for renewable energy.
The solar energy sector was virtually non-existent prior to the launch of the Renewable Energy Independent Power Producers Program (REIPPP) in 2011. However, after the program's inception, installed capacity for solar PV reached more than 30% of total renewable energy in 2018. With more than 2,500 hours of sunlight per year, solar energy is the most easily accessible resource in South Africa.
The average solar radiation level in the country ranges between 4.5kWh/m2 and 6.5kWh/m2 per day. Under REIPPP, the country’s aim is to install 8,400 MW of solar PV generation capacity by 2030, enough to power 1.5 million households. Furthermore, the country intends to install 18 GW of solar PV by 2050. The market is expected to grow as Eskom, South Africa's state power utility, plans to sign several renewable energy projects with private producers.
These projects are expected to generate 2,305 MW of green power, mostly from solar and wind. This is expected to increase investment for solar PV manufacturers, which is anticipated to spur the solar photovoltaic market in the coming year. Following the outbreak of COVID-19, the country's solar power market experienced a slight slowdown, with low demand for small-scale solar projects and low investments in large-scale solar projects in first and second quarter of 2020.
Despite travel restrictions and supply chain disruptions, solar PV installed capacity in 2020 increased by 37% year-over-year (YoY). This massive increase in 2020 was attributed to large-scale solar PV projects that were completed in the same year. Furthermore, falling solar PV module and system costs, combined with supportive government policies, are expected to drive the market during the forecast period.
Market Trends, Drivers, Restraints, and Opportunities
- Increasing initiatives and support from government is projected to drive the market growth.
- Rising competition from alternative renewable energy sources such as onshore wind power, small hydropower, and bioenergy can limit the market growth during the forecast period.
- High cost of installation, timely maintenance, and Covid 19 pandemic is estimated to hinder the market growth.
- Growing demand for energy is anticipated to create immense opportunities for the market players.
- Canadian Solar Inc
- Enel SpA
- JinkoSolar Holding Co.
- JA Solar Holdings.
The major players in the SA solar photovoltaic market include Canadian Solar Inc, Enel SpA, JinkoSolar Holding Co., and JA Solar Holdings.
Companies are engaging in mergers, acquisitions and partnerships to expand their market share.
In April 2020, Scatec Solar announced that its partners had grid-connected and begun commercial operation of the third 86 MW solar plant in Upington, South Africa, completing the 258 MW solar power complex.
Dyason's Klip 2, a 86 MW facility, is expected to produce 217 GWh per year. In September 2020, South Africa's solar industry welcomed government plans to purchase 6.8 GW of additional renewables from independent power producers by 2022, but warned that a “urgent response” is required to address the country's ongoing energy crisis.
The country's energy ministry revealed that the country plans to buy a total of 11,813 MW of new generation capacity by 2027, the majority of which will be solar and wind, with all electricity purchased through a tendering process by state utility Eskom.
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