South African households have been encouraged to install rooftop solar panels as one of the solutions to combat the country’s energy crisis.While President Cyril Ramaphosa would like to see a greater uptake of rooftop solar, Europe’s own power panic has added to a global shortage of key resources. Fearing a cold winter without Russian gas, Europeans are rushing to buy solar panels and batteries.This sudden surge in demand, compounded by pre-existing supply chain issues, has led to longer lead times for solar installations.The global shortage of batteries and polysilicon will likely remain until at least 2025, according to producers and researchers. For more stories go to www.BusinessInsider.co.za.
President Cyril Ramaphosa has announced a raft of measures to address South Africa’s debilitating energy crisis, including a push for more households to install rooftop solar panels, but Europe’s own power problems have added to the surging global demand for batteries and polysilicon.
South Africa’s prolonged energy crisis has been described as the biggest risk to the country’s economy. Eskom’s consistent failure to meet the country’s energy needs has led to increasingly worse bouts of load shedding, leaving South Africans “justifiably frustrated and angry,” according to President Ramaphosa.
“The crisis that we are facing requires that we should take bold, courageous, and decisive action to close the electricity gap,” said Ramaphosa during a public announcement on Monday night.
“This is a call for all South Africans to be part of the solution, to contribute in whatever way they can to ending energy scarcity in South Africa.”
Ramaphosa’s 10-point power crisis plan includes scrapping the licensing threshold of 100MW, Eskom buying more electricity from existing independent power producers, importing power from Botswana and Zambia, and doubling the amount of renewable generation capacity procured through Bid Window 6.
The President’s plan is also “designed to enable businesses and households to invest in rooftop solar.”
“South Africa has great abundance of sun which we should use to generate electricity. There is significant potential for households and businesses to install rooftop solar and connect this power to the grid,” said Ramaphosa.
“To incentivise greater uptake of rooftop solar, Eskom will develop rules and a pricing structure – known as a feed-in tariff – for all commercial and residential installations on its network. This means that those who can and have installed solar panels in their homes or businesses will be able to sell surplus power they don’t need to Eskom.”
While Ramaphosa’s most recent commitment to solving South Africa’s energy crisis has been welcomed, hard questions around the implementation of this plan remain.
The push for more rooftop solar panels on houses, for example, faces significant hurdles, like differing municipal regulations concerning installations and high costs, which have excluded the majority of South African households from renewable power setups.
Although the prospect of selling surplus power may see homeowners rush to install solar panels, as intended, ongoing and worsening supply chain issues will keep South Africans waiting.
“Government policies and increased investments in solar PV projects are expected to increase the installed solar PV capacity of the country in the coming years,” Tonye Irms, the founder and CEO of WiSolar, an end-to-end solar energy company in South Africa, told Business Insider SA.
“However, we expect to witness supply chain issues as shipping and freight costs continue to increase.”
These supply chain issues cited by Irms aren’t new and have only been exacerbated by the Covid-19 pandemic. Similarly, the boom in electric vehicle production and push towards renewable sources of energy has seen a surge in demand for battery cells, which producers haven’t been able to answer fully.
The short supply of these batteries, which also play a vital role in storing solar energy absorbed through rooftop panels, is expected to last for at least three years, according to GlobalData’s May report on the battery industry, due to a “shortage of mined and refined battery metals, akin to the current chip shortage.”
This shortage has been worsened by Russia’s invasion of Ukraine and the ensuing power panic across Europe. Russia is the European Union’s (EU) leading supplier of imported oil, gas and coal, accounting for two-fifths of gas supplies. In response to the war and in solidarity with Ukraine, the EU has moved to reduce these imports. Russia, in its response to sanctions, has shut off vital gas pipelines into Europe, sparking the region’s own energy crisis.
This crisis has seen Europe push for other forms of power, like coal-fired power stations or extending nuclear power plants. There’s also been a big drive towards green energy, like solar and wind. Part of the EU’s plan includes a “Solar Rooftop Initiative, with a phased-in legal obligation to install solar panels on new public and commercial buildings and new residential buildings.”
Frans Timmermans, the Vice-President of the European Commission, during an address to the Extraordinary Energy Council on the security of energy supply in the EU on Tuesday, noted that Europeans were “buying solar panels as much as they can.”
This surge in demand for batteries in Europe was confirmed by Mark Becker of Cape Town-based M Solar Power, who recently attended Intersolar Europe 2022, a leading exhibition for the solar industry, in Munich.
“There is competition for this resource. I just came back from Germany recently, and every single person and their dog wanted to change to solar and electric cars, because [of] the Russians [cutting gas supplies] and countries are very, very concerned that if they have their gas turned off, how [are] they going to drive or heat [offices and households],” Becker told Business Insider.
“We’re not the only people after this resource. The lead times for [battery] storage are longer than what they were in the previous year due to supply constraints and competition in other markets. So, those are concerns.”
Solar-powered systems can feed electricity into the grid through an inverter, without needing a battery, but storage becomes critical when wanting to power households outside of daylight hours, when national supply comes under the most pressure at peak demand times. Without adequate energy storage systems, South Africa’s grid won’t fully benefit from rooftop solar panels during the hours when it needs it most.
And it’s not just batteries driving up lead times for solar panel installations. There’s also a shortage of polysilicon, a form of silicon used to produce solar modules. At least one major polysilicon maker expects the shortage to last for another five years, according to PV magazine.