The future of the solar industry without load shedding

*This content is brought to you by Jaltech

Load shedding proved to be a tremendous advantage for the solar industry. The constant interruption of electricity was an annoying reminder for energy consumers that an alternative to Eskom had to be found. What this meant for role players in the solar market is that customers were swift in choosing to either embrace or delay their adoption of a solar solution. 

With over 100 days without load shedding, the solar market has experienced a significant decline in sales. The industry widely believes that this drop is due to the absence of load shedding rather than any commercial reasons for choosing solar. 

To put figures into perspective, year to date, Jaltech has issued more than 400 solar proposals amounting to over R4.1 billion. Over the past 14 weeks alone, the average week saw more than R120 million in solar proposals, all sourced through solar installers. 

Only approximately 15% of the R4.1 billion has been progressed forward, of which we estimate that half will be finalized. Had load shedding still existed, we estimate that this amount would have been doubled if not tripled.

Is there still a case for solar? 

Over the past 12 months, Jaltech has successfully built a solar portfolio comprising over 160 commercial and industrial assets. This impressive figure indicates that more than 160 business owners recognized solar power as a more reliable and cost-effective alternative to Eskom, with the financial benefits expected to increase over time. 

All these businesses opted for Power Purchase Agreements (PPAs), enabling them to bypass the initial costs of the solar system and pay only for the electricity generated. 

The financial appeal of solar energy 

Despite the recent reduction in load shedding, Eskom’s electricity price continues to climb. For instance, as of 1 July, the cost of municipal electricity went up by over 12.5%, and recently, Eskom has requested an increase of over 36% for next year. 

In contrast, the cost of solar technology has been steadily decreasing. When looking at the actual numbers, a Power Purchase Agreement can result in the energy consumer paying as little as 95c per kWh, which, if purchased from Eskom, could be as high as R3.

So where will the market go? 

The adoption of solar will continue to grow in the South African market, especially as electricity costs rise each year. Additionally, energy players are capitalising on electricity arbitrage. This involves charging batteries using solar power and then utilizing the stored energy during peak periods when electricity prices are at their highest.

For most businesses, solar energy has offered a cheaper, fixed, and predictable cost for decades. 

Jonty Sacks – Partner at Jaltech

If your company is considering solar energy, contact Jaltech for a competitively funded option. Click here for more information and to contact Jaltech.

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