The Rise of Solar Power in South Africa

Austin Olivier
Oct 9
6 min read

Updated: Nov 4

Falling Costs & Better Technology: Solar’s New Affordability

The economic case for solar has never been stronger. In the past few years, panel, inverter, and battery prices have plummeted worldwide, as noted by BizNews.com. South African suppliers, awash in stock from past demand spikes, have cut prices sharply. One installer reported over 20% off-grid system price drops in 2024. For example, a 40 kWh/day system fell from approximately R500k to R350k, according to mybroadband.co.za. BloombergNEF and local analysts predict these are the lowest prices most consumers will see. Indeed, one distributor warned, “this is a prime opportunity to buy” at the “lowest price point you’ll ever see,” mybroadband.co.za.

Solar companies now offer flexible financing options. These range from bank loans and green mortgages to lease/PPA schemes. Tax incentives, such as Sec 12B accelerated write-offs for commercial systems, further cut effective costs, as highlighted by decentral.co.za.

With Eskom tariffs climbing—12.7% approved for 2025/26, after 18.7% hikes in 2023/24—payback periods are shrinking. A local analysis notes that if you base ROI on today’s tariffs, you could recoup the cost of your investment faster and continue to make significant savings, as mentioned by personal.nedbank.co.za. In practice, many homeowners and businesses see solar paybacks in 2 to 4 years or less, accelerating their savings as utility rates rise.

Tech Advances: Innovations in Solar Technology

Modern hybrid inverters and storage solutions, many equipped with advanced energy management systems (EMS), make solar user-friendly. For example, Deye’s 125 kW–2.5 MW BOS-BESS inverter can switch in less than 20 milliseconds between grid, solar, or backup modes. It also supports zero-export and time-of-use energy management, according to deyeinverter.com.

Dyness’ new “stackable” systems, including Stack100 and Stack280, allow customers to plug in battery modules ranging from approximately 15 kWh to 215 kWh each. This modular approach enables businesses to scale up to the megawatt-hour range. These commercial and industrial storage systems boast built-in fire suppression, smart cloud monitoring, and simple expansion capabilities. This allows farms or factories to rapidly grow their solar and storage capacity.

Financing Ease: Making Solar Accessible

Local lenders and suppliers now offer tailored loans and Power Purchase Agreements (PPAs). Installers report that the combination of cheap hardware and available financing, including VAT-backed solar loans and government-backed incentives, makes even large systems affordable. Section 12B allowances, in particular, mean that up to 28% of the cost for systems less than or equal to 1 MWp can be deducted immediately, as noted by decentral.co.za. In short, low prices combined with flexible funding mean that South Africans can install solar today with positive cash flow.

Policy Pushback: Tariffs, Taxes, and the “Sun Tax” Debate

The government and Eskom are scrambling to protect revenue. Eskom’s new Retail Tariff Plan, effective April 2025, splits bills into hefty fixed charges and a high usage rate. This major shift in tariff philosophy effectively penalizes reduced grid draw, as reported by mybroadband.co.za. Small users now face a Generation Capacity Charge and Legacy Charge on top of consumption fees. Critics argue that these changes aim to discourage many from installing solar systems by robbing self-generators of savings. Concurrently, proposals to levy fees on net exports or add registration costs have sparked uproar, dubbed attempts to “tax the sun.” So far, the most concrete measure has been a 10% import duty on solar panels, part of a plan to boost local manufacturing, as mentioned by businesstech.co.za.

These regulatory moves have rattled the industry. The Organisation Undoing Tax Abuse (Outa) has even urged people to delay formal registration of new solar installations until rules stabilize. Ironically, by trying to capture some revenue, authorities may drive more users fully off-grid. In the face of capacity charges and uncertain feed-in terms, many solar owners now prefer a “zero-export” setup. This means sizing systems to meet 100% of demand and storing excess power in batteries, rather than risking credits being taxed away. As one installer put it, "the only good kilowatt-hour is the one you don’t sell back." In practice, customers are advised to “overcompensate”: install 2 to 3 times more solar panels and storage than a 90% off-grid estimate. This ensures that any days of poor sunlight won’t force grid imports. This strategy guards against future “sun taxes” and justifies the added cost today, ensuring genuine energy independence.

Off-Grid Over-Size Strategy: Planning for the Future

Many experts now recommend designing systems as if fully off-grid. For consistent power, you typically need roughly double to triple the panel and battery capacity of a 90%-reliance system. For instance, a home that normally needs 8 kW of PV and 20 kWh of batteries might install around 20 kW PV and 50 kWh storage. The rationale is simple: any sunlight shortfall, such as long dark winter spells, is borne on your own batteries, not on Eskom’s supply. Oversizing is especially prudent if authorities cut export credits in the future; you’ll then still run on stored or onsite power. MyBroadband’s off-grid model confirms this: to go fully off-grid, an “oversize factor” of approximately 2.5 is recommended to cover winter lows.

In summary, cutting the cord is now often the safest bet. Rising power bills and shaky policies mean utility supply is a liability. Going 100% solar with storage, using a petrol or diesel generator only as a last resort, locks in stable costs and immunity from any grid “sun tax.” With equipment prices at historic lows, the incremental expense of extra panels is still easily outweighed by long-term savings.

Who’s Leading the Solar Charge: Farms, Businesses, and Homes

Farmers and Agribusiness

Agriculture is one of the hardest-hit sectors by Eskom’s squeeze. Irrigation pumps and processing plants face exorbitant demand charges and “line fees” on top of soaring tariffs. Many farm groups now openly encourage off-grid solar. As Decentral Energy summarizes, PV and batteries let growers sidestep Eskom’s unpredictable rate increases and avoid legacy and capacity charges. Citrus and maize farms already pay up to R7/kWh during morning peak times—roughly three times normal rates. A well-designed hybrid system easily beats those peaks. Tax breaks, such as a 100% first-year write-off for systems less than or equal to 1 MWp, dramatically improve farm ROI. In short, farmers see solar not just as a green choice but as critical cost control. “Off-grid agriculture systems aren’t just an option; they’re fast becoming the strategic future of energy autonomy,” notes one industry blog.

Commercial & Industrial

Manufacturing plants, warehouses, and retail chains are also racing to solar. A recent survey found dozens of malls, factories, and data centres have installed PV systems atop their roofs. Large PPA deals and corporate PPAs, even “wheeling” off-site solar, offer 50 to 80% cheaper power compared to Eskom rates. Portfolio landlords are turning rooftop areas into power plants. For example, a leading REIT reported, “we had to develop an energy business” as part of property returns. In sum, South African business leaders see captive solar as essential. Even utility lobbyists concede that many firms have “developed their own energy businesses” in response to Eskom’s service issues.

Households and Small Users

Across the income spectrum, ordinary consumers are going solar. From suburban homes to rural villages, people want reliable lights and fridges. Small businesses, including shops, schools, and clinics, installing 5 to 20 kW systems are paying back faster than ever. Backup-battery costs have dropped by over 20% recently, making residential off-grid feasible. Demand for home systems spiked in 2024 when a load-shedding announcement was made. Installers like Seren Electrical noted record sales “as price hikes made solar a strategic long-term investment.” With some metros already suspending grid exports or planning limited buyback rates, smart homeowners are simply covering 100% of their load on-site.

Conclusion: Accelerate the Shift to Solar

The evidence is overwhelming: Eskom’s role is shrinking as solar scales. Grid blackouts may be less frequent, but only because millions of kilowatts of PV now stand ready on rooftops and fields. Solar generation in South Africa has surged, with roughly 7,300 MW of rooftop solar as of 2025, up approximately 25% year-on-year. This is enough to eclipse all of Eskom’s independent projects combined.

For farmers, businesses, and families alike, the message is clear: invest aggressively in solar and storage now while it’s cheap. Oversize your system and aim for full grid independence. Future tax hikes or export penalties will then hurt your utility bill, not your pocket. As one financial adviser put it, the “only free lunch” in energy is power you make and use yourself. With advanced hybrid inverters and stackable batteries enabling turnkey solutions, deyeinverter.com and dyness.com, South Africans can seize that lunch before anyone tries to plate it with a tax.