Chinese solar power producers have flooded the renewable energy market with growing capacity, leading to a fierce price war that has driven down prices for solar panels and batteries in South Africa. Oversupply and increased production led to a significant drop, as well as a lower-than-expected loading rate. Solar technology is becoming more affordable, leading to a solar revolution in the country.
Subscribe to BizNews Insider's morning newsletter to stay up to date with important content. The newsletter will arrive in your mailbox on weekdays at 05:30. Register here .
Anna Labuschand
Oversupply and a price war between Chinese manufacturers with increased production capacity have driven down prices for solar panels and batteries in South Africa in recent months.
This is according to two popular solar panel installation companies, AWPower and Solar Advice.
In May 2023, Bloomberg reported that Longi Green Energy Technology, the world's largest producer of solar cells , reduced the price of silicon wafers by 31% .
This comes after solar silicon prices have nearly halved since early February 2023.
An important factor was several new plants that increased production and helped eliminate material shortages in 2021 and 2022.
Green Building Africa also reported that US solar module prices fell to their lowest level in two years in May 2023.
Locally, MyBroadband has found that Solar Advice's solar panel prices have fallen significantly since the start of the year.
Jinko Solar Mono Percium 455W solar panel price on 19-Jul-2023 decreased by 20.6% to Rs.2830.78 from Rs.3563.85 on 19-Jan-2023.
The price of JA Solar's largest 545W monocrystalline solar panel rose from R4,477.34 to R3,428.31 over the same period, or 23.4%.
According to Christian Hatting, AWPower's chief executive, and Armando da Silva, director of solar consultancy, oversupply due to lower-than-expected load losses has also pushed down prices in South Africa.
Hating and Da Silva told MyBroadband that after a spike in sign orders at the start of the year, demand has fallen sharply.
They explained that suppliers have ordered a large number of panels as South African households show increased interest in back-up power systems amid reports of an upcoming phase 8 load shedding.
An analysis of Eskom's peak load shedding statistics in February 2023 showed the utility had already drawn more than 7,000MW of power from the grid - the technical definition of phase 8 outages.
Meanwhile, Hatting said, suppliers can raise prices for solar panels for backup systems if they don't have enough inventory to meet demand. Since then, this situation has attracted attention.
"Now supply has exceeded demand, which means that suppliers have reduced prices to get rid of the excess volume," Khatting said.
“At the beginning of the year there was a sudden increase in demand that the supplier was not prepared for, which led to a strong increase in prices; Now the suppliers have too much stock and the warehouse is empty,” Da Silva said.
Da Silva said the rand-dollar exchange rate and the availability of raw materials also contributed to lower prices.
He estimated the price reduction would be up to 80 cents per watt, which would be 364 rand for a 455 watt panel or 436 rand for a 545 watt panel.
solar tax refund
South African taxpayers are also entitled to a 25% rebate on the cost of residential solar panels up to a maximum value of R15,000.
However, you will need to purchase 60,000 rand worth of panels to recoup this amount. This will allow you to purchase 21 Jinko Solar 455W Mono Percium panels.
This may be a last resort for most households who can no longer sell their electricity back to the grid.
With a maximum combined output of 9.5kW, the 21 panels can charge a Tesla Powerwall at 13.5kWh in about an hour and a half.
Unfortunately, the government won't help you reduce the cost of your battery or inverter because their benefits don't cover it.
However, there is at least some good news on that front.
Da Silva told MyBroadband that prices for these components have fallen due to the same factors that have driven panel prices down.
In terms of raw material costs, Chinese prices for lithium carbonate, a key component of today's backup batteries, hit a 19-month low in April 2023 after hitting a record high in November 2022.
Although the price has improved slightly since then, it is still less than half of the 2022 average.
Prices for nickel and cobalt, used in phosphate-free lithium-ion batteries, also fell.
The chart below from Trade Economics shows the price of lithium carbonate per ton in Chinese yuan over the past year.
Read also:
This article was originally published by MyBroadBand and is reprinted with permission
