Africa is on the brink of  an alternative energy boom.

As an example, the solar market is seeing massive growth, driven by demand in South Africa.

John van Zuylen, CEO of the Africa Solar Industry Association (AFSIA), says that, after years of lacklustre solar photovoltaic (PV) activity, a massive 3,1Gw was installed in 2022 and 3,7Gw in 2023 – and this excludes household installations.

“In 2024, between 4,2Gw and 4,5Gsw is expected to be installed, so we are looking at a a cumulative total of above 16Gw of installed PV,” says Van Zuylen. “We are also witnessing a complete shift from utility-size installations to commercial and industrial (C&I) projects. These C&I project now account for a massive 64% of all installations – up from 53% in 2022.”

South Africa is driving the move to solar, with about 80% of the entire African solar business taking place locally.

Historically, close to 50% of all cumulative projects are driven by South Africa, which is now home to 47% of all solar in the continent.

When it comes to storage, the same trends are apparent: In the last year, storage volumes have grown exponentially with a massive 1 908GwH installed last year, but 9 784GwHs are currently under development.

Import numbers are equally dramatic: In 2022, South Africans imported $345-million worth of solar products; by 2023, this shot up to $947-million.”

Between record high levels of load shedding and a tax incentive for businesses and individuals, many waverers seized the opportunity during 2023 to lessen their dependence on Eskom.

But, according to some reports, the shine wore off towards the end of 2023.

“It’s no secret that there is very close correlation stages loadshedding and demand for alternative energy,” explains Ryan Martyn, chief operating officer of Syntech, which offers the Gizzu range of power stations.

“There is probably a combination of issues driving the market, but the most noticeable peaks are when there is loadshedding, and power becomes the most important thing that people need to address. Then buying alternative power takes available money away from other purchases.

“When there is no loadshedding, people go back to normalising their spend.”

Another factor driving the slowdown in spending is that many of those households that can afford to buy alternative power solutions have already invested in them, Martyn adds.

In fact, the alternative power market is now showing all the signs of maturing, and Martyn believes a number of scenarios will help sales to tick up.

“As some of the less-effective solutions exit the market, supply will normalise as there will be lees choice but greater certainty.”

Martyn explains that when the market boomed last year, a flood of products made their way into the market, some of dubious quality and others not even certified for the South African grid. In today’s more sober environment, these are quickly disappearing.

Another factor that will drive demand up would be a resumption of regular load shedding. “We’ll see an immediate spike when this happens.”

And, as with any mature market, we are starting to enter an upgrading or replacement phase, Martyn points out.

“We’re getting to the stage now where early adopters are having to replace their batteries. People are starting to realise that their batteries have a limited number of cycles, and when those have been completed, the batteries will deteriorate.”

In the new cycle, the early lithium-ion batteries will likely be replaced with LiFePO (lithium-iron phosphate) batteries, which have a significantly longer life – but they too will run out of cycles and have to be replaced.

“The mistake a lot of people made in the return on investment (ROI) calculations was not factoring in the cycles. Many battery manufacturers have a 10-year warranty, but this is if the batteries are being used in a failover situation. If you’re cycling it up and down daily – even three times daily in a load shedding Stage 6 scenario – you can very quickly run through the cycles.

“So people are going to have start replacing batteries if they want to get the full benefit of solar generation.”

The good news, says Syntech CEO Craig Nowitz, is that the price of these batteries has come off its peak, and is now running about 50% of last year’s cost.

The equipment that people buy this year will offer a number of advantages over what was available last year, Nowitz adds.

What’s very important for South African users is the fact that their alternative power supplies are used every day, and have to recharge quickly – at higher levels of load shedding there could be just a two hour window available.

New systems can now charge up to critical levels within two hours, he says.

“The battery cycles are also increasing, so the product lifetime – and thus the ROI – is increased.”

Battery expansion is another new feature, Nowitz says, with users now able to add batteries to their power stations, or even run two of more power stations in parallel.

“Overall, the alternative power technology is becoming more stable and more mainstream,” he concludes.

Michael Kan, brand executive at Mustek, says the alternative power market has reached a new level of maturity and that it’s doubtful we’ll ever witness another explosion in sales like early 2023 when South Africans were exposed to the highest stages of load shedding they’d ever experienced.

“There has been a slowdown in demand since about June last year to today,” Kan says, attributing this mainly to lower stages of load shedding.

“There is definitely an elasticity of demand for alternative power solutions depending on how high load shedding stages are,” he continues. “When we experience extended Stage 6 load shedding, for example, we can see a 50% increase in demand. At present, that demand is hovering around 10% so it’s not as elastic as it used to be.

“There are other macro-economic factors to consider too such as high interest rates and rampant inflation.

“So will we see another boom in the market like we did?” Kan asks. “In my opinion, definitely not. If you look at the figures, sales are back to where they were prior to the boom, but there’s a steady uptick.”

During the boom period, literally thousands of companies popped up to take advantage of this lucrative market. But the numbers are slowly being whittled down as market conditions get tougher.

“The market is oversaturated,” says Kan. “And it’s becoming more difficult – especially for the entry-level guys. You also have factors like local government bringing in regulations for installations. Cape Town is a prime example of this with the city only allowing certified products to be installed. If your product doesn’t meet the city’s criteria then it won’t be approved. That limits entry into the market too.”

Kan’s advice to resellers looking to thrive in alternative power is to not only align themselves with reputable solutions, but also to focus on upskilling.

“It’s a very competitive market,” he says, “so you’ve got to look at value-add. With so many pop ups emerging last year – all with similar solutions – it made it very hard to differentiate. Your differentiator is going to be your value-add. Do you have better expertise? After-sales service? Customer care? Swop-out units? Quality of work?

“Value-add is key to ensure you are a premier reseller,” he adds. “You create that value-add that other resellers can’t.”

As for the future of the market? Kan is bullish.

“I think with the amount of stock in the market and the number of entrants we won’t see much change from a supply point of view,” he says. “As far as demand is concerned, I think it will pick up. Like I said, I don’t see another massive boom. Instead, I think everyone will be getting a smaller piece of the pie.

“There is always going to e a place in the market for solar,” Kan adds. “A lot of the pop ups will disappear, but there is definitely room for those resellers adding value to their solutions.”