Renewables pricing index up 0.21% in June

From the newsletter

The Renewables Rising Price Index saw a 0.21% increase in June, cancelling last month's decline to now stand at 999, a figure just below where we started building the index in April. The monthly index reflects the combined average price changes for cash product prices and power costs in four major African economies: Kenya, Nigeria, Egypt and South Africa.

• We track product prices by monitoring the cost of solar panels, inverters, lithium-ion batteries and solar home systems across the four countries. A rise in our index indicates increasing renewable energy costs. 

• This latest uptick in the index was primarily driven by a 3.8% increase in solar home system prices in Egypt. Declining fuel prices across all four countries also impacted the overall attractiveness of renewables.

More details

• The prices of lithium-ion batteries, solar panels, and inverters were unchanged in China, a key import market for many African countries. For instance, China accounts for about 80% of the global solar market's supply.

• Solar panels also remained stable in local markets. Solar home systems, however, saw small changes, with a 3.8% increase recorded in Egypt. Generally, the currencies of these four countries experienced very minimal fluctuations, with the Naira and Rand gaining the most against the US Dollar. However, these gains did not result in any discernible lower costs for consumers.

• Lithium-ion battery prices were unchanged across Kenya, South Africa, and Nigeria, but they did change in Egypt by EGP 1,089, which represented just a 1.1% increase. Egypt is one country undertaking major battery energy storage projects, and perhaps the huge demand could be a reason for retailers to increase the price. Inverters saw a price decline by about 4.8% in South Africa and 2.6% in Egypt.

• Electricity prices only changed in Kenya, reducing by about 1.2% across the residential and commercial tariffs. This was due to reduced fuel cost charges on thermal power generation. Fuel prices had the most fluctuations, with a decline across all four countries.

Our take

• The global oil market is expected to have an oversupply in the months to September, and this will keep prices low in response to market forces of demand and supply. This might impact short-term energy plans, as consumers may opt to use fuel when it is cheap and delay the switch to renewables.

• The Nigerian Naira is expected to perform better with small fluctuations, especially after the repayment of its $3.4 billion IMF loan. This could likely increase the supply of foreign currency in the market.

• However, major policy changes that target taxing renewable energy technologies in Kenya and South Africa will push prices higher in 2026 when they take effect.