Solar panels in South Africa are cheaper than ever as imports crash

Following a boom in the first half of the year, imports of solar panels in South Africa have plummeted in the past few months, according to data from the South African Revenue Service (Sars).

During the first half of 2023, the country recorded significantly higher values of solar panels, inverters, and batteries streaming in through customs.

According to Gaylor Montmasson-Clair from Trade and Industrial Policy Strategies, the value of solar panels alone hit $651 million (R12.1 billion) in the first six months of the year.

The total value of the imported panels in 2022 was $345 million (R6.42 billion).

However, that demand started to wind down significantly in the second half of the year.

In August 2023, solar installers told MyBroadband they observed a sharp decline in demand for systems.

According to Sars import data, the value of imported panels peaked at R3.25 billion in May 2023. This dropped off slightly to R3.19 billion in June 2023 before sliding to R2.78 billion by July 2023.

By August 2023, the value plunged to less than half the previous month — R1.15 billion.

The graph below shows how South Africa’s solar panel imports changed between January and August 2023.

This data shows that solar distributors have significantly reduced the volume of stock they are bringing into the country.

AWPower managing director Christiaan Hattingh told MyBroadband that many solar installers on online forums and Facebook groups said their businesses had seen a 70–80% reduction in sales activity in October 2023, compared to the peaks observed earlier in the year.

Hattingh attributed the slowdown in demand to three factors:

  • Consumers are under financial pressure, with high inflation impacting the prices of essential goods like food and fuel.
  • There has been reduced load-shedding in the past few months, meaning consumers are less likely to make “grudge” purchases of systems.
  • A surge in counterfeit panels around the middle of the year caused uncertainty among installers and consumers.

Hattingh also said most households who could afford to put down cash for their solar installations had already done so in the first half of the year.

Record-low prices around the world

High interest rates make it difficult for others to justify financing their systems, even while the prices of inverters, batteries, and solar panels are at their lowest.

Hattingh said AWPower’s main solar panel supplier had seen prices plummet 40–50% from the start of 2023.

The price reductions are being driven by an oversupply in the global market for solar panels despite record-high orders and an attempt to smother the proliferation of counterfeits.

The world’s biggest solar panel manufacturer has warned that the prices are “irrationally” low. Nevertheless, industry experts expect them to continue dropping up to the end of 2023.

Despite the significant decline in imports to South Africa, it is important to emphasise that the total value of the panels brought into the country in 2023 still outstrips any previous years by a significant margin.

The Sars data showed that solar panels to the value of R15.93 billion were imported in the first eight months of the year.

Even if the value climbs by just 20% of that number in the last four months of the year, the total will more than quadruple 2022’s figures.

If one considers that the prices of solar panels have also declined by roughly half compared to last year, the difference in the volume of solar panels that have come through customs should be even more substantial.

Now read: Court freezes R29 million belonging to national electricity voucher syndicate

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Solar panels in South Africa are cheaper than ever as imports crash