SIYABULELA MAKUNGA | Survey findings shed light on renewable energy industry

Over the past few years, SA has witnessed an unprecedented rate of power outages.

The ongoing concerns around the supply of electricity in the country have sparked a growing interest in renewable energy solutions, particularly solar power. To gain insights into the state of market competition and the use of renewable energy resources by businesses and families for electricity generation, the Competition Commission initiated a comprehensive survey in 2023.

The observations made from this survey will likely guide the commission in understanding the use of renewable energy by businesses and consumers as well as identifying prevalent competition issues within the sector.

Our research focused on three specific renewable energy technologies: solar PV panels, inverters and energy storage batteries. We collected data from households and businesses situated in Johannesburg, Durban and Cape Town.

I am highlighting some of the most interesting survey results and outlining how the findings are likely to help shape the commission’s advocacy work in the renewable energy space, policy recommendations and continued engagements with stakeholders in this growing industry.

If we look at the percentage of renewable energy products purchased by consumers in the past seven years, there has been a steady increase in interest and uptake since 2022. Recent purchasing patterns reveal a marked surge in demand for inverters, as evidenced by 40% of consumers buying inverters in the past six months.

The purchasing of solar PV panels and storage batteries have also increased. These trends suggest a rising consumer focus on self-sufficiency and sustainable energy.

Evidently, the majority of respondents found renewable energy products within an affordable range, with over 40% indicating that the products are all available for less than R20,000. The survey data further indicated that a large portion of consumers (79% of those surveyed) opted to purchase their renewable energy products as standalone items.

A large majority of consumers are self-financing their renewable energy projects, with personal funds used towards the purchasing and installation of products.

These observations demonstrate that renewable energy solutions can be accessible at various budget levels, dispelling the notion that clean energy is exclusively reserved for those with money.

Despite this data, 41% of respondents reported they found renewable energy products moderately expensive. This implies that the perception of expense is a pivotal factor that could deter prospective consumers and inhibit the widespread transition to renewable energy technologies.

The data further suggests that while the renewable energy market has many competitors, the prices of solar PV panels, inverters and storage batteries remain high. This indicates a need for companies to differentiate themselves beyond pricing to attract customers in a highly competitive industry.

In the SA market, there is strong support for local manufacturers, with 60% of consumers choosing them over imports, while a smaller fraction goes for direct international purchases.

The persistent power crisis in SA has considerably impacted the local business landscape, driving a marked shift towards renewable energy products. Survey results illustrate that inverters show the highest adoption rate at 80%.

Concurrently, solar PV panels and storage batteries are observed to be used by 50% of the surveyed businesses, indicating a growing preference for the importance of using solar panels and the storage of energy during power cuts.

The data gathered revealed that since 2023, bundle options reached a 49% adoption rate, closely followed by solar panels. This highlights the growing popularity and acceptance of renewable energy products as bundle options and the continued increase of solar panel purchases.

 The commission remains determined to monitor the prices of sustainable energy technologies in a transparent manner, and these key takeaways from the survey do suggest there are areas where the commission could play a role in reducing the barriers to entry in the renewable energy industry including promoting regulatory consistency.

Suggestions on streamlining regulatory processes that might impact the adoption of renewable energy products as consumers move towards off-grid solutions are but one of many opportunities the commission might explore.

Ensuring pricing transparency in the renewable energy sector is likely to become increasingly necessary to aid businesses in comparing prices across different suppliers. Also, guidelines that encourage suppliers, manufacturers and other industry participants to disclose hidden or unexpected fees has the potential to be of use in this effort.

The commission’s advocacy team continues to analyse these survey results to understand how best to develop requisite support initiatives aimed at ensuring a growing, de-concentrated and inclusive renewable energy industry. 

* Makunga is spokesperson for the Competition Commission of SA