Solar Energy Is Now Essential Infrastructure, Not An Alternative

Having spent two decades in investment banking and renewable energy, one truth has become clear: solar energy is no longer a green alternative.

It is essential infrastructure.

And the question investors and policymakers should be asking isn’t if South Africa should go solar, but how fast we can scale it.

The case for solar as a financial instrument

Solar energy has matured into a predictable, cash-flow investment.

Once installed, its operational costs are low, and performance is stable over time.

That makes it fundamentally different from most other asset classes in a volatile market.

For businesses, solar provides a hedge against rising electricity tariffs as well as planned and unplanned power outages – two variables that have crippled productivity and profitability for over a decade.

Eskom’s 12.7% tariff increase for 2026 will only widen the gap between grid costs and self-generation returns.

For households and financiers, the numbers are equally compelling.

Declining technology costs, coupled with advances in battery storage and smart energy management, have unlocked reliable energy solutions.

This means businesses and households can significantly reduce their energy expenses and safeguard against ongoing electricity price increases and downtime.

The policy framework

South Africa’s renewable energy framework is anchored in long-standing programmes such as the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which continues to evolve alongside initiatives such as JET-IP (Just Energy Transition Investment Plan), signalling a continued evolution toward private-sector participation and decarbonisation.

Each presents opportunity and complexity.

For service providers, policy alignment and regulatory engagement are not box-ticking exercises; they’re the backbone of long-term scalability.

The recent adoption of the Solar Exclusion Norm, which exempts certain solar projects from environmental authorisation, is a welcome step toward streamlining approvals.

That said, the country is not reinventing the wheel when it comes to solar.

In Australia, rooftop solar penetration exceeds 37%, while Vietnam’s solar capacity scaled from 105MW to 16GW in just two years.

Platforms managed by artificial intelligence (AI) in Europe and Asia have informed approaches to leveraging AI, and decentralised grids are redefining efficiency and customer engagement.

The lessons are difficult to ignore: modular deployment, incremental scaling, attention to grid flexibility and connection, and incentives for customers selling energy back to the grid are crucial factors to consider in scaling solar in South Africa.

Scaling people, not just panels

Scalability itself depends heavily on a skilled workforce. Technical expertise in installation, system integration, maintenance, finance, administration, and more will be essential to sustained growth and improved operational efficiency.

While South Africa’s renewable energy skills base is growing, the finance and technical expertise is there, though still a small pool, and the pace of development must accelerate to meet the sector’s expanding demands.

In this vein, the private sector must commit beyond project execution to include education and training programmes that focus on upskilling and reskilling professionals, as well as providing new entrants to the sector with the correct knowledge and capabilities.

This type of investment in human capital will increase the sector’s capacity to deliver projects as well as support broader economic development in a new jobs economy.

A moment of opportunity

With the country’s favourable solar conditions (receiving more than 2,500 hours of sunshine a year) and solar’s capacity to deliver ROI to both consumers and investors, South Africa’s solar energy industry holds massive potential for economic transformation and energy security.

A sustainable, renewable energy future is in reach, but it can only be achieved with engagement from the private sector through the financing of projects, innovation in technology, and developing a skilled workforce.