Measures include, among other things, investigations into excessive pricing and collusion among competing equipment suppliers.
Over the past several years, the prevalence of households and businesses investing in renewable energy solutions in South Africa has skyrocketed – and the Competition Commission has taken note and suggested some policy changes for the sector.
Despite the recent reduction in the prevalence and severity of load shedding, policy developments both domestically and globally underpin that the renewables sector is here to stay.
Noticing this shift, the Competition Commission conducted a survey on the state of competition and the use of solar PV panels, inverters, and storage batteries by households and businesses across metros in South Africa.
“The increasing demand by households and businesses for renewable energy products in South Africa requires policymakers and regulators to facilitate policy interventions that can address their energy access needs,”
said policy analysts at the Commission at an information session on 28 August.
Among other findings, the Commission saw that while access has somewhat improved, the barriers for households and businesses in South Africa attempting to procure renewable energy products remain very prevalent.
The survey identified several key issues, and the Commission provided some policy suggestions for the Department of Trade, Industry and Competition (DTIC) to address them – including a push for the standardisation of equipment quality and the mandatory certification of installers to protect consumers.
According to the survey, some of the suggested policy interventions include the following:
- Promote localisation and incentivise the growth of local manufacturing capacity of renewables through funding initiatives.
- Promote investment in local manufacturing capacity by diverse investors, including micro-lenders and consumers.
- Facilitate financial mechanisms aimed at lowering the economic barriers for lower-income households and small businesses, expanding access to renewable energy solutions.
- Investigate potential excessive pricing and collusion among competing suppliers.
- Establish mandatory certification of installers and product quality standards to ensure the products are fit for purpose.
- Promote consumer awareness to buy local and questions they should ask when making purchasing decisions. Consumers have the right to choose the supplier/installer of the products without automatically cancelling the product warranty.
- Financial institutions should allow for increased choice in the selection of the installer when the products are financed.
Focusing on the increase in demand, the Commission found that the procurement of renewable energy products in South Africa increased from 2021 to 2023, with inverters and storage batteries being the most sought-after products.
This can be attributed to the intensity of load shedding and the potential ease of sourcing the products. With load shedding suspended for over 150 days, the surge in renewable energy investments is expected to wane.
However, the experts at the launch outlined that both domestic and global policy developments continue to support the growth of renewable energy.
“If we don’t move towards a very low-carbon intensive economy in South Africa, we really are going to face significant problems,”
said Gerhard Fourie, chief director of Green Industries at the DTIC.
When asked whether the decrease in load shedding will greatly impact stable demand, he cited policy developments that is likely to keep it up.
“Big industries in South Africa in particular are realising that in order for them to remain competitive amid these recent developments, they have to lessen their carbon intensiveness,”
Fourie said.
Source: Business Tech
