The evolving landscape of solar energy for South African industries

In a world where energy dynamics are constantly shifting, Sakhile Ngcongwane, Business Development Manager at SolarAfrica, said that renewable energy is no longer confined to the simplistic installation of a few rooftop panels.

For businesses intent on maximising the benefits, diversification is the key.

As South Africa's energy landscape transforms, mixed policy signals are raising questions about solar energy’s continuing value, particularly for large energy consumers in the commercial and industrial (C&I) sectors.

Ngcongwane offered reassurance: solar still retains its merits, albeit in a more complex role than in the past.

While the current stability of load shedding may lead some to believe that renewable energy has slipped down the national agenda, the reality is more nuanced.

The carbon tax, initially designed to incentivise reduced greenhouse gas emissions, is stalling, primarily due to lobbying from corporate interests.

Since its inception in 2019, Phase 1 of this tax allowed companies to evade payments for up to 95% of their emissions, rendering it largely ineffectual.

Despite proposed changes to increase the carbon tax in the future, recent budget statements have revealed a dampened commitment, with tax-free allowances extended to 2030 and stricter penalties seemingly put on the back burner.

As geopolitical volatility shapes policy decisions globaly, South Africa's weak stance on carbon pricing may ultimately hinder its renewable ambitions.

Interestingly, external influences, such as the EU's Carbon Border Adjustment Mechanism (CBAM), are set to put pressure on local exporters who may face hefty tariffs if their products do not adhere to equivalent carbon standards.

Starting from January 2026, businesses with high emissions that are not adequately accounted for by carbon pricing in South Africa may face significant competitive disadvantages.

Yet, the case for solar retains considerable strength.

As a means of energy production, solar offers not just environmental benefits but also substantial cost savings for businesses.

By generating energy on-site, particularly during peak hours when electricity costs soar, companies can lower their dependence on expensive utility services, mitigate peak demand charges, and gain control over their long-term energy expenditures.

However, Eskom’s newly implemented Retail Tariff Plan (RTP) presents fresh challenges.

This restructuring, characterised by increased fixed costs and lower variable rates, has altered how major energy users are billed.

While it aims to provide cost predictability, it diminishes savings from self-generated energy, necessitating a more strategic approach to energy consumption and management.

Herein lies the opportunity for what Ngcongwane terms "energy stacking."

This methodology allows businesses to combine different energy sources: utilising solar for self-generation, battery energy storage systems (BESS) for reliability, and "wheeling" to secure energy at scale, untethered by limitations such as rooftop space. Additionally, trading surplus energy can offer flexibility and drive down costs.

This diversified energy strategy not only enhances cost savings and energy security but also bolsters sustainability credentials, ensuring compliance with emerging carbon regulations and increasingly rigorous environmental, social, and governance (ESG) standards.

It is clear: solar energy is evolving.

While traditional systems might have seemed adequate in the past, the future lies in a layered approach, blending various energy sources and technologies to create robust, cost-efficient structures.

For C&I leaders willing to act now, the adoption of flexible, diversified energy frameworks could result in significant carbon reductions and a long-term competitive edge in a rapidly changing market.

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