MSIZI KHOZA | SA can learn from Vietnam’s rooftop solar installation programme

SA is a country with immense potential. Yet, the nation finds itself in a profound polycrisis with high levels of unemployment, deep social inequality and a protracted and crippling energy environment. On one hand SA is the most advanced economy on the African continent with a financial services sector and ecosystem that consistently punches far above its weight.

On the other, it is among the “most unequal societies in the world” as stated by the World Bank in a 2022 report, all while having to navigate an energy crisis which has become all-consuming and crippling to business activities.

According to Absa’s macroeconomic research division, had it not been for loadshedding, SA’s economic growth would have been 1.3 percentage-points higher in 2022. By all indications, loadshedding in 2023 will be more severe and more crippling .

SA’s energy crisis can be summarised in a single problem statement: How do we add enough new generation capacity to give Eskom the headroom it requires to perform necessary maintenance across its coal-fired generation fleet?

Here, an international example might prove instructive. In one year, Vietnam’s ambitious rooftop solar installation programme managed to add 9.3 gigawatts of electricity with an aggressive rollout of 101,000 roof-top solar installations. What makes this even more remarkable is that this was achieved between June 2020 and December 2020 while the world was grappling with Covid-19 lockdowns.

The reason Vietnam is such a notable example to follow is that both economies are coal energy dependent and face limitations around investments in transmission networks while having to grapple with foreign investors cutting back on investments in coal-powered infrastructure.

How did Vietnam do it? Both the public and private sector knew the country could not afford replacing ageing coal power stations and overhauling its transmission and distribution networks. This would result in major disruptions to a society already contending with the harsh realities of global lockdowns and economic contraction. Instead, it opted to focus on a mass rollout of roof-top solar and allowed citizens to not only protect their own access to electricity, but also be rewarded for tackling the broader electricity crisis the country was facing.

A key feature of the incentive scheme was a generous feed-in tariff for solar users to sell surplus power back into the national electricity grid at a price guaranteed for 20 years — a model which saw citizens feel they were playing a collaborative role in tackling the energy transition.

We are seeing some encouraging signs coming out of the Western Cape to implement a similar model and we should see this adopted by other provinces as roof-top solar gains traction. The shift toward a greener and more sustainable energy mix is irreversible.

The pace of transformation has been slower than required, but the independent power producer initiatives are being recognised as some of the best. There is nothing, more pressing or more mission-critical a task than to resolve the energy crisis.

SA can learn two very important lessons from Vietnam’s success. First, Vietnam added 16.5GW of solar power in just two years.

Second, incentives matter. It will be interesting to note the details around the tax incentives for solar power and other measures, as announced by President Cyril Ramaphosa in his State of the Nation Address.

With a crisis comes the opportunity to emerge stronger than before. We have invested time and money in understanding the issues plaguing our energy environment. We cannot allow a good crisis to go to waste; we have the opportunity to re-imagine a new energy future. Indeed, inspiration has come from the unlikeliest of places — Vietnam. Let us get to work. 

• Khoza is head of environmental, social and governance, Absa CIB