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The combination of a low-carbon transition and reduced module prices is driving explosive demand in emerging markets such as South Africa

published: 2023-06-28 17:49

In response to the challenge of meeting domestic electricity demand and achieving energy decarbonization, South Africa is actively promoting domestic solar generation.

Despite Eskom supplying over 90% of the country's electricity, power outages are a frequent occurrence due to the aging and poorly maintained coal-fired power plants. Consequently, businesses and households in South Africa are increasingly seeking alternatives to the power grid, with PV generation being a favored choice.

Moreover, South Africa has committed to closing 7 out of its 15 coal-fired power plants by 2030, as announced during COP21, as part of its decarbonization goals. While Eskom still faces power shortages, photovoltaic (PV) systems are emerging as an ideal alternative to fossil fuels in South Africa. Currently, the export volume in the module market is relatively low, positioning South Africa as a promising emerging market. Exporting 66 GW modules to South Africa will significantly stimulate the global PV demand market, creating substantial growth opportunities.

In the first five months of 2023, China’s module exports to South Africa reached approximately 2.4 GW, indicating that the market is still in its early stages. This represents a remarkable 353% year-on-year growth, making it the fastest-growing market for China's module exports in 2023.

According to BP data, South Africa’s power generation capacity reached 244.3 TWh in 2021. If the penetration rate of PV generation reaches 10% and considering the utilization hours of PV generation, the demand for PV modules would amount to approximately 20.4 GW. Therefore, China’s plan to export 66 GW modules can support the PV generation in South Africa to achieve a penetration rate of around 30%.

The declining price of modules is currently contributing to a rapid increase in the global potential demand for PV. Numerous markets with similar characteristics to South Africa, characterized by low PV volume but fast growth rates, such as the Philippines, Slovenia, Malaysia, Belgium, Italy, and France, offer significant potential. As module costs continue to decline to $1.3-1.4 per W, the potential demand for PV in these markets will gradually be unleashed.


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