Renewable Energy Industry in South Africa Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

South Africa Renewable Energy Market Analysis

The South Africa Renewable Energy Market size is estimated at 18.41 gigawatt in 2025, and is expected to reach 31.10 gigawatt by 2030, at a CAGR of 11.05% during the forecast period (2025-2030).

South Africa is undergoing a significant energy transition as the country moves away from its traditional coal-dependent power generation infrastructure. The state power utility, ESKOM, has announced plans to decommission between 8-12 GW of coal-fired capacity by 2030, marking a decisive shift toward renewable energy sources. This transition began with the closure of the 1 GW Komati Power Plant, which is being replaced with a renewable energy complex featuring a 500 kW agri-voltaic plant, fabrication factory, and microgrid assembly supported by 244 MWh of battery storage capacity. This transformation serves as a blueprint for the planned decommissioning of other major coal power stations, including the Grootvlei, Hendrina, and Camden facilities.

The government's commitment to renewable energy development is evidenced through its robust procurement programs and policy frameworks. In April 2022, the Department of Mineral Resources and Energy (DMRE) launched a significant tender for 2.6 GW of renewable energy capacity under the sixth round of the Renewable Energy Independent Power Producer Procurement Program (REIPPPP). The tender included 1 GW of solar PV and 1.6 GW of wind power capacity, demonstrating the government's balanced approach to diversifying its renewable energy portfolio. The fifth round of REIPPPP, concluded in October 2021, resulted in 25 successful bids, comprising 12 wind projects and 13 solar projects.

Private sector participation in South Africa's renewable energy sector has shown remarkable growth through strategic investments and partnerships. In March 2022, Tronox Holdings entered a landmark long-term power purchase agreement with SOLA Group for a 200 MW solar power project, scheduled for completion by the fourth quarter of 2023. Similarly, Red Rocket commenced commercial operations of its first wind farm with an installed capacity of 147 MW, located on the border of the Northern and Western Cape Provinces, demonstrating the private sector's confidence in the market's potential.

The development of renewable energy infrastructure faces certain geographical and technical challenges, particularly in transmission capacity. Despite the Northern Cape Province's high renewable energy potential, many developers encountered difficulties during the fifth round of REIPPPP due to transmission constraints. This has led to a strategic shift in project development, with developers increasingly targeting other provinces for utility-scale projects. This geographical diversification is expected to result in broader socio-economic benefits across different regions of the country, while also addressing the technical limitations of the current transmission infrastructure.

South Africa Renewable Energy Market Trends

Strong Government Support and Policy Framework

The South African government has demonstrated a robust commitment to growth of the renewable energy industry through comprehensive policy initiatives and financial support mechanisms. The cornerstone of this support is the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP), which has successfully facilitated private sector investment in grid-connected renewable energy generation. The program's effectiveness is evidenced by its ability to attract approximately USD 13 billion in private capital by 2021 for constructing and operating 77 solar and wind facilities. Additionally, the government's energy subsidies have seen a dramatic increase, tripling since 2017 to reach USD 10.4 billion by 2020, indicating strong financial backing for renewable energy investments in South Africa.

The government's commitment is further reinforced by ambitious clean energy targets and continued program expansion. In April 2022, the Department of Mineral Resources and Energy (DMRE) launched the sixth bid window under REIPPPP, seeking proposals for 2.6 GW of new renewable generation, split between 1.6 GW of onshore wind and 1 GW of solar photovoltaic capacity. This ongoing support is aligned with South Africa's broader environmental goals, including the target to achieve net-zero emissions by 2050, demonstrating a long-term commitment to sustainable energy development. The government's comprehensive approach includes both policy frameworks and financial incentives, creating a stable and attractive environment for renewable energy market investments.

Abundant Natural Resources and Favorable Geographic Conditions

South Africa possesses exceptional natural resources that make it particularly suitable for alternative energy development, especially in solar and wind power generation. The country experiences more than 2,500 hours of sunshine annually, with average solar radiation levels ranging between 4.5 and 6.5 kWh/m2 daily. This solar potential is particularly noteworthy when compared internationally—South Africa's annual 24-hour global solar radiation average of 220 W/m2 significantly exceeds that of major developed regions, surpassing the United States (150 W/m2) and the European Union (100 W/m2), making it an ideal location for solar energy development.

The country's wind energy potential is equally impressive, with an estimated total wind power potential of 67,000 GW. This vast potential is complemented by diverse geographical conditions that support various types of renewable energy installations. The country's extensive coastline and inland regions with high wind speeds provide optimal conditions for wind farm development, while the abundant sunshine in regions like the Northern Cape Province creates ideal conditions for both photovoltaic and concentrated solar power installations. These natural advantages have already attracted significant projects, such as Amazon's 10-megawatt solar plant in the Northern Cape Province, which generates over 28,000 MWh of energy annually, demonstrating the practical viability of harnessing these resources in the green energy sector.

Energy Security and Grid Modernization Needs

South Africa's pressing need for energy security and grid modernization has become a significant driver for renewable energy trends adoption. The country's aging coal fleet and increasing pressure to reduce reliance on fossil fuels have led to strategic initiatives for power generation diversification. This is exemplified by ESKOM's comprehensive plan to decommission 8-12 GW of coal-fired capacity by 2030, starting with the closure of the 1 GW Komati Power Plant. The transition includes replacing these facilities with renewable energy for industry complexes, incorporating innovative solutions such as battery storage and micro-grid systems, setting a precedent for future power plant conversions.

The urgency for grid modernization is further emphasized by existing transmission constraints, which have influenced renewable energy trends project development patterns. These constraints have led to a strategic shift in project locations, encouraging developers to explore opportunities in various provinces beyond traditional focus areas like the Northern Cape. This diversification not only addresses grid capacity issues but also promotes broader socio-economic benefits across different regions of the country. The transformation is supported by significant private sector involvement, as demonstrated by projects like Tronox Holdings' agreement with SOLA Group for a 200 MW solar power facility, showcasing the industry's commitment to modernizing South Africa's energy infrastructure.

Segment Analysis: Type

Wind Segment in South Africa Renewable Energy Market

The wind energy segment has emerged as the dominant force in South Africa's renewable energy market, holding approximately 40% market share in 2024. This leadership position is supported by the country's substantial wind power potential, estimated at 67,000 GW. The government's strategic focus on wind energy development through initiatives like the Renewable Energy Independent Power Producer Procurement Program (REIPPPP) has been instrumental in driving this segment's growth. Major wind energy projects across various provinces, particularly in the Northern and Western Cape regions, have contributed significantly to the installed capacity. The segment's prominence is further reinforced by continued foreign direct investment and partnerships between local and international developers, demonstrating strong market confidence in South Africa's wind energy sector.

Solar Segment in South Africa Renewable Energy Market

The solar energy segment is demonstrating remarkable growth potential in the South African renewable energy sector for the period 2024-2029. This exceptional growth trajectory is driven by South Africa's abundant solar resources, with most regions receiving more than 2,500 hours of sunshine annually and solar radiation levels ranging between 4.5 and 6.5 kWh/m2 per day. The country's strategic location and climate conditions make it one of the world's premier destinations for solar energy development in South Africa. The segment's expansion is further supported by decreasing technology costs, improving efficiency of solar panels, and the government's commitment to achieving net-zero emissions by 2050. Both utility-scale solar projects and distributed solar installations are contributing to this growth, with particular emphasis on photovoltaic power and concentrated solar energy technologies. Solar energy companies in South Africa are playing a pivotal role in this expansion, leveraging technological advancements to enhance efficiency.

Remaining Segments in Type Segmentation

The hydropower and other renewable energy segments play vital complementary roles in South Africa's renewable energy landscape. Hydropower serves as a reliable baseload power source and offers the advantage of quick response to peak demand periods. The segment's development is concentrated along the eastern escarpment, where approximately 6,000 potential sites have been identified. Meanwhile, the other renewable energy types segment, which includes waste-to-energy and bioenergy projects, represents emerging opportunities in the market. These segments contribute to the diversification of South Africa's renewable energy portfolio and support the country's goal of achieving a more sustainable and resilient power generation mix. Renewable energy companies are increasingly exploring these opportunities to diversify their portfolios and enhance sustainability.