SA is the most attractive emerging country for solar energy investors, according to a study by global market analysis company IHS Technology.
SA scored 66 out of 100 in the IHS Emerging Photovoltaic (PV) Markets Attractiveness Index for the fourth quarter of 2013, placing it 17 points above second-placed Thailand. Other nations following closely behind are Turkey, Romania and Mexico.
"The index ranks the attractiveness of PV markets to investors, developers and manufacturers in four key areas: macroeconomic climate, potential market size, project profitability, and pipeline maturity," says the IHS in a statement.
The Department of Energy's Integrated Resource Plan for electricity targets 8.4 gigawatts (GW) of solar PV capacity to be produced by 2030, and the IHS cites this as a major contributor to SA's high standing on the index.
Investors will be buoyed by this plan and are expected to contribute financially and in infrastructure development to make it happen, according to the IHS.
SA's reputation was further enhanced by yesterday's launch of a solar panel production plant, in Stellenbosch, following a 20-year investment by both the public and private sector.
Photovoltaic Technology Intellectual Property, along with the Department of Science and Technology, opened Africa's first semi-commercial plant, which manufactures thin-film solar electricity panels.
Growing industry
Local solar energy producers are making infrastructural and commercial progress, according to the SA Photovoltaic Industry Association (SAPVIA) - which grew its membership from eight in 2011 to 130 members at present.
Dr Chris Haw, SAPVIA spokesperson, is not surprised at SA's ranking on the IHS Index. "As an emerging market, SA is unique in its financial sector stability and this is one of the key drivers which allow investment to take place.
"In the last four years, we've seen the market go from pretty much nothing to a market of around R30 billion to R40 billion in terms of contracts awarded or projects under construction," he adds.
Haw says the South African market is defined by two main sectors. "We have solar energy being produced by government - in our case Eskom. We also have embedded generation customers, who are currently using regular electricity, but wish to produce solar energy to offset the amount of electricity they have to buy."
The local PV market is growing rapidly and Haw points to the swift rise in SAPVIA membership as indicative of an emergence of new solar energy producers.
Haw notes investors also consider the political and regulatory climate, which often works in the country's favour. "A lot of solar power contracts signed by Eskom are underwritten by Treasury, which give them a lot of credibility."
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