Africa's Solar Energy Transition: Investment Needs and Localisation Challenges

Africa's solar energy sector is experiencing unprecedented growth, with a record installation of approximately 4.5 gigawatts of new solar capacity in 2025, marking a 54% increase from the previous year. This surge is primarily driven by utility-scale projects, particularly in South Africa, Nigeria, and Egypt. The Global Solar Council (GSC) projects that by 2029, Africa could add over 33 gigawatts of solar capacity, contingent upon securing an estimated $46 billion in investments by 2030 to meet the electrification goals of 29 countries participating in a World Bank-backed initiative. The investment is expected to comprise $28 billion in debt, $14 billion in equity, and $4.6 billion in grants and subsidies.

Africa Solar Capacity Seen Rising Sixfold After 2025 RecordAfrica Solar Capacity Seen Rising Sixfold After 2025 RecordFrom solar panels to batteries, China dominates renewable energy and forces the rest of the world to play by its rules; Chinese plans expand across Africa and Latin America, including Brazil.What’s stopping sunny South Africa’s solar industry? Court case sheds light on the wider problemSouth Africa establishes Project Management Office to drive Renewable Energy Masterplan as localisation concerns persist

In South Africa, the push for local manufacturing of solar panels has led to legal challenges, notably a court case involving ARTsolar, a local manufacturer. ARTsolar contends that local content rules intended to boost domestic production have not resulted in the expected orders for locally assembled solar panels. Critics argue that these rules were implemented without a coherent industrial strategy, leading to conflicts among manufacturers, developers, and the government. The lack of a unified approach has resulted in exemptions that undermine local production efforts, raising concerns about the effectiveness of South Africa's renewable energy policies.

What’s stopping sunny South Africa’s solar industry? Court case sheds light on the wider problemSouth Africa establishes Project Management Office to drive Renewable Energy Masterplan as localisation concerns persistAfrica Solar Capacity Seen Rising Sixfold After 2025 Record

To address these challenges, South Africa has established a Project Management Office within the Independent Power Producers Office to oversee the implementation of the Renewable Energy Masterplan. This initiative aims to develop local renewable energy and battery storage value chains, potentially creating up to 25,000 jobs by 2030. However, industry stakeholders express concerns that staged consignment concessions, which allow for duty-free imports of renewable energy equipment, may dilute the objectives of the Masterplan by weakening incentives for local manufacturing and contributing to job losses.

South Africa establishes Project Management Office to drive Renewable Energy Masterplan as localisation concerns persistWhat’s stopping sunny South Africa’s solar industry? Court case sheds light on the wider problemFrom solar panels to batteries, China dominates renewable energy and forces the rest of the world to play by its rules; Chinese plans expand across Africa and Latin America, including Brazil.

China's significant investment in renewable energy across Africa complicates the landscape. With approximately 90% of solar panels installed on the continent originating from China, the country has leveraged its dominance in solar technology to expand its influence through initiatives like the Belt and Road Initiative. This strategy has provided developing nations with affordable renewable energy technology, but it also raises concerns about dependency on Chinese manufacturing and technology.

From solar panels to batteries, China dominates renewable energy and forces the rest of the world to play by its rules; Chinese plans expand across Africa and Latin America, including Brazil.

The future of Africa's solar energy sector hinges on aligning financial frameworks, regulatory environments, and local manufacturing capabilities. While the potential for growth is substantial, the challenges of localisation and international competition must be addressed to ensure sustainable development. As stakeholders monitor the implementation of the Renewable Energy Masterplan, the need for a coherent industrial strategy that integrates local content rules with broader economic goals remains critical.

South Africa establishes Project Management Office to drive Renewable Energy Masterplan as localisation concerns persist