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August 22, 2024As the sun rises on a new day, the South African solar industry’s revolution continues pushing forward. In the continent’s push for accessible and sustainable energy, it’s time to analyse innovations shaping the future of the South African solar industry.
With solar solutions emerging as an increasingly vital part of our world today, traditional sources continue to prove unreliable.
The solar power industry has shown to be one of the most viable alternative energy sources locally, with record-breaking numbers in recent years. But what’s behind this driving force, and what hurdles remain?
With a positive outlook and a growing solar market, let’s examine the industry, its challenges, and how to stay ahead of the curve.
Read next: Digital payment processing.
Unpacking the South African solar industry
South Africa benefits from roughly 2,500 hours of sunlight every year, and with such abundance, the country is progressively moving toward renewable energy. At the end of 2023, the country saw an estimated 7.8 GW of solar installations, excluding residential installations.
This is according to the Africa Solar Industry Association report, which also called 2023 “the best year for solar in the world”. The report also revealed that 79% of all new capacity installed throughout Africa happened locally.
Further demonstrating the solar gold rush, the South African solar energy market will reach a Compound Annual Growth Rate of 32.03% by 2028. This translates into an astounding growth projection of 2,307.36%. Solar solutions are here to stay and are quickly becoming champions of the people.
Behind this significant boom is a blend of various factors that have crippled an outdated and poorly operated power supply system. Rising energy costs, the continued energy crisis fueled by political issues, and increased environmental awareness contribute to this.
In addition, growth in the industry is also largely driven by the emphasised need for reliable energy in both residential and industrial sectors. This facilitates a cleaner approach to the country’s energy supply, which ensures productivity and profitability.
What’s standing in the way of the South African solar industry?
As the solar industry in South Africa is proving to be the light at the end of loadshedding, it still faces challenges. Alongside these potential problems, there is also a buffet of solutions to innovate the sector.
Battling an increase in initial costs
Despite decreasing overall costs, high initial costs in South Africa are the first obstacle to businesses’ and individuals’ adoption of solar energy. This widespread barrier stems from the fact that South Africans simply do not have the funds to afford skyrocketing setup costs.
This represents a problem where initial installation costs are out of reach, and long-term savings are almost impossible to imagine. Solar suppliers must balance high quality and profit gain as the sector expands.
As more people and businesses are forced to turn to solar alternatives, the need for versatile payment systems and solutions is greater than ever.
Subscription model payments, which include debit orders and recurring billing backed by trusted payment providers, are at the forefront of these solutions. By offering these, solar providers position themselves to improve accessibility to solar power for individuals and businesses.
Discover how innovative payment solutions like subscription models can revolutionise your solar offering.
Dealing with supply chain disruptions
Another far too recognisable bump to successful solar adoption rests within potential supply chain disruptions. Relying heavily on a global supply chain, with components sourced from regions worldwide, the solar industry has to adapt innovative solutions to get what’s needed when needed.
These disruptions begin at ground level, with vital raw materials, such as silicon, glass, and aluminium, struggling to reach manufacturing due to increased transportation costs. This, coupled with fluctuations in supply and demand and disruptions in mining activities, creates the perfect storm.
At higher levels, disruptions arise from trade tensions and geopolitical uncertainties, leading to an overall spike in supplier costs. These costs directly translate into higher prices asked of businesses and individuals. Prices that, in South Africa, are at times only affordable to the wealthy.
Solar businesses can survive with a steady, resilient, reliable cash flow that benefits all income classes. Effective cash flow management is essential for solar suppliers to adapt to disruptions and secure resources without negatively impacting customers.
Staying ahead of technological advancements
Keeping up with technological evolution within the industry can also hinder the continued growth of solar power companies. However, the solar power sector offers ample technological innovation and collaboration opportunities.
Getting a seat at the table comes at a price. Solar suppliers need a functioning cash flow to leverage tech advancements and strategic partnerships. On an uneasy financial foot, continued investment in research and development can quickly become out of reach.
Investment in industry innovations, including material sciences, manufacturing processes, and energy storage solutions, is paramount to improved efficiency and performance. This will increase consumers’ accessibility and cost-efficiency.
Unfortunately, funds don’t just fall out of the sky, which is why numerous solar power businesses are shifting their focus to effective business funding. Beyond creating a financial strategy tailored to each specific business’ needs this also allows for a dedicated revenue stream geared towards tech advancements.
Rising competition from other energy sources
While the industry is thriving, its success hangs on a precariously thin thread, and solar suppliers must strengthen their ability to withstand competing energy sources. Fluctuations in fossil fuel prices and investment in other renewable energy sources pose the greatest threat to this.
Collaboration is key in this regard, and a strong, competitive solar industry must be fostered to succeed. From raw material suppliers to manufacturers and installers, a harmonious industry can endure.
That said, this relies on mutual monetary benefit. Solar suppliers have to engage with other key players in the industry and create favourable relationships. With resources in high demand, on-time creditor payments are the ideal foundation for establishing lasting industry relationships.
Technicalities with grid integration and infrastructure
Another hurdle is ageing infrastructure and grid integration. Years of mismanagement and lack of maintenance make integrating intermittent solar energy into the existing power grid significantly more difficult.
Without massive upgrades to accommodate small- and large-scale solar integration, the industry will be throttled, and growth will suffer. This necessitates lasting collaboration between solar companies, utilities, and the government to modernise the grid infrastructure.
As a result, this collaborative effort can ensure smooth energy integration, improved grid stability, and enhanced overall system resilience. Beyond these, these strategic partnerships can facilitate knowledge sharing, resource pooling, and risk mitigation, benefitting the entire industry.
Maintaining skilled and valuable staff
The successful adoption and implementation of solar and solar energy companies in South Africa requires a skilled workforce. The backbone of this workforce is employees with technical expertise who are valued, respected, and paid on time.
Solar suppliers must integrate salary payment systems that keep staff happy. Considering the high price tag that comes with solar equipment, unrest among your employees can lead to escalating issues, such as internal theft.
As the industry emerges from its infancy, internal disputes and disruptions pose a real threat, one that solar suppliers should avoid.
Another aspect to keep in mind is the potential disappointment of staff should solar suppliers not offer training opportunities. Human error with payroll disbursement plays a prominent role in hurdles that could have been avoided in the administration of your business.
Want to thrive in a competitive energy market?
Learn how efficient financial management can propel your solar business to new heights.
Embrace future-forward management in the solar power industry
Standing at a crucial crossroads, South Africa is perfectly set to take full advantage of the global boom in solar energy if approached correctly. Solar solutions can become a beacon of light for a frustrated country as the industry sees record-breaking numbers.
Converting from traditional fossil fuels, paired with other challenges in the sector, does create a complex scenario; however, there are promising resolutions. South African solar suppliers can create a greener, more affordable future if innovations such as subscription models and advancing technology are adopted.
Although adoption processes are tricky, with a trusted third-party management system and payment provider, services like payment gateway integration, bulk payments, and risk reports can streamline your business. Grow into the future with Netcash today.
Read next: Payment gateways in South Africa (2024).
Author:
Samantha Mills
Sales Lead
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Meet Samantha, the Sales Lead at Netcash who crushes goals and builds rock-solid relationships. Sales, for her, is all about genuine connection and building trust. Authenticity and honesty are her superpowers, and she uses them to win every time, whether in sales or elsewhere. Don’t let the “Sales Lead” title fool you – Samantha started out as a numbers whiz, a qualified accountant with a passion for solutions. But what truly lit a fire in her was the art of uncovering the perfect fit for clients, and that’s where sales came in. It’s the perfect blend of her financial expertise and her talent for building trust. Her colleagues know her as a high-performance machine who leads with adaptability and a keen eye for detail. When it comes to standards, honesty, and integrity, Samantha sets the bar high. She’s not afraid of the tough conversations, because clear expectations are the bedrock of any strong relationship, business or personal.
