Rooftop solar outpaces Eskom's private procurement

From the newsletter

South Africa’s rooftop solar installations have reached 7,345MW, surpassing all the renewable energy power utility, Eskom, gets from independent power producers (7,172MW). This is a 23% increase over the past year. It highlights the rapid decentralisation of the country's energy landscape, largely fueled by commercial and industrial uptake.

• Despite Eskom successfully containing its load-shedding, consumer motivations have now evolved from pure outage avoidance to long-term economic planning in view of upcoming tariff increases next year.

• However, grid operators confront a challenging daily balancing act. As most customers don’t have batteries, Eskom must swiftly boost power station output at sunset to match demand spikes, making it a costly manoeuvre.

• Our take: The market has taken energy security into its own hands, driven by economics and necessity.… Read more (2 min)

More details

• The latest data from the National Transmission Company of South Africa (NTCSA) estimates rooftop PV capacity at 7,345 MW. This includes both residential and commercial installations. NTCSA’s "residual load method" gauges this growth by comparing grid demand on sunny versus cloudy days.

• Across Africa, consumers are quickly adopting solar. A recent report shows that the continent’s solar panel imports reached a new record in the 12 months leading up to June 2025, increasing by 60% compared to the previous period. This growth occurred in most countries across the continent, with 20 nations setting new records for imports.

• Part of the reason for the move is that solar power is now significantly cheaper than fossil fuels, with costs dropping by 80–90% over the last decade. This has made renewables, particularly solar, the cheaper options for new power generation in many areas. Experts also suggest that solar will continue to become more affordable, leading to more adoption in the coming years.

• Other factors leading to the uptake in solar in African countries are fossil fuel subsidy removals, for example, in Nigeria, which has caused consumers to opt for much cheaper power. For countries like Zambia that are heavily reliant on hydropower, consistent droughts have been a key factor. In South Africa, Eskom’s loadshedding has been a driver for a while, even though the power utility has since contained it.

• A formidable challenge for further adoption, however, is the high upfront costs of purchasing solar home systems, especially in South Africa. This is a deterrent for onlooking consumers who might want to purchase. Consumer finance from banks and pay-as-you-go institutions is also high and unsustainable for low-income users.

• Overall, utility power companies are facing mounting pressure from renewables, even in revenue. Eskom officially announced that it was accelerating the establishment of a separate Renewable Energy Business, and launched a tender to recruit a firm to help set up this new entity. It also recently launched its first Renewable Energy Offtake Programme to monetise its own renewable projects and retain large commercial customers by enabling them to transition to low-carbon operations without installing their own generation capacity.

Our take

• This milestone proves the market has taken energy security into its own hands, driven by economics and necessity. Utilities can no longer just be generators; they must become managers of a complex, bidirectional grid system.

• The critical next step is modernising grid infrastructure and market rules. The NTCSA must accelerate the implementation of smart grid technologies and new tariff structures that fairly value distributed energy resources without stifling growth.

• For Africa, this is a blueprint and a warning. Other nations watching South Africa’s energy crisis must note: the solution will be multifaceted. Proactive investment in grid modernisation alongside enabling policies for distributed generation is essential to harness this trend rather than be overwhelmed by it. The future grid will be a platform, not just a pipeline.