Product prices: SA inverter prices drop by 4.8%

From the newsletter

Cash prices for solar panels, solar home systems, and inverters remained relatively flat across Nigeria, Egypt, and Kenya in June. However, South Africa experienced a 4.8% decline in inverter prices, and Egypt saw an average 1.1% increase in lithium-ion battery prices, as retailers adjusted their consumer prices to meet market operating costs.

• Renewables Rising collects and monitors monthly data on select products (solar panels, inverters, solar home systems and lithium-ion batteries) across four representative countries: Nigeria, South Africa, Egypt and Kenya. 

• Since March, prices for the four tracked products have shown only marginal changes. However, this could change as a new financial year commences for some traders.

More details

• We record prices in local currencies to capture the actual market changes as they happen. This approach helps us avoid the distortions that can occur when converting prices to a single base currency, which can be influenced by exchange rate fluctuations.

• Egypt's lithium-ion battery cash price increase after a major drop could be attributed to its dynamic renewables landscape. The fluctuation could be a result of short-term supply chain disruptions or local market adjustments amid ongoing global lithium carbonate cost pressures and regional demand changes.

• South Africa, on the other hand, plans to increase import duties on renewable energy manufacturing components, including solar, wind, and battery storage parts, with proposed tariffs ranging from 5% to 30% on over 80 items. This policy will protect and boost local manufacturing capacity by making imported components more expensive while encouraging domestic production.

• Kenya's lack of change in cash prices for renewable products is mainly supported by a strong Kenyan shilling, which helps mitigate import cost fluctuations. However, the upcoming Finance Bill proposes the introduction of a 16% VAT on renewable energy products starting June 2026, which could increase costs for consumers and developers soon.

• Nigeria also benefits from relative naira stability, which supports price stability for products. Nonetheless, the market faces significant uncertainty due to a proposed ban on solar imports, which threatens to disrupt supply chains and increase costs or limit the availability of solar equipment. This could slow renewable energy deployment and impact investor confidence in the sector.

Our take

• Governments eyeing renewables revenue could stunt progress. As renewable energy adoption rises, cash-strapped African governments may increasingly view the sector as a potential revenue source, leading to new taxes that could hike product prices and slow the pace of the energy transition.

• The fate of Africa's renewable energy growth depends on navigating volatile currency markets. Stability is key, but devaluations could cripple projects reliant on imported components and dollar-denominated financing. 

• Lastly, even as Africa embraces renewables, misguided protectionist measures like import bans on solar equipment risk undermining progress, creating artificial scarcity and hindering the widespread adoption of clean energy solutions.