A new report from BDO SA reveals that the country’s renewable energy sector is entering a transformative phase, driven by unprecedented private sector investment, regulatory reforms and urgent energy security needs.
The BDO SA 2025 Renewables Report paints a picture of a sector at a critical inflection point, where more than a decade of policy groundwork is finally translating into tangible capacity expansion and economic impact.
More than R290bn mobilised since 2011
Since the launch of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) in 2011, SA has attracted more than R292bn in renewable energy investment, securing over 9.6GW of generation capacity.
The programme has generated 133,764GWh of electricity cumulatively, offsetting 129.2-million tonnes of CO₂ emissions while creating about 93,000 job-years across construction and operations.
“The renewable energy sector has transitioned from pilot projects to a critical component of national energy security,” says Nato Oosthuizen, head of renewables at BDO SA. “What we’re seeing now is not just growth in capacity, but a fundamental restructuring of SA’s energy market.”
Policy reforms unlock private participation
Recent regulatory changes have been game-changing. The removal of licensing thresholds for embedded generation and the adoption of the Electricity Regulation Amendment Act in 2024 have enabled corporations and municipalities to procure power directly from independent producers, bypassing traditional procurement bottlenecks.
The report highlights that private renewable installations now account for a significant and growing portion of new generation capacity. Corporate power purchase agreements and self-generation projects are reshaping the energy landscape, driven by companies seeking cost stability, emissions reductions and resilience against ongoing grid challenges.
Oosthuizen says: “We’re witnessing a shift from a state-led model to a more competitive and diversified market. This is opening unprecedented opportunities for both local and international investors who recognise the long-term stability of clean energy assets.”
Ambitious investment targets to 2030
Three major policy frameworks, the Integrated Resource Plan (IRP), the Just Energy Transition Implementation Plan, and the South African Renewable Energy Masterplan (SAREM), collectively establish a roadmap linking decarbonisation with industrialisation, localisation, and social equity.
These frameworks estimate that more than R1.5-trillion in investment will be required by 2030, necessitating blended finance, concessional funding, and innovative risk mitigation tools. The report emphasises that green bonds, public-private partnerships and development finance institutions will be central to mobilising this capital.
Solar and wind lead capacity expansion
Installed renewable capacity now exceeds 15GW, with solar photovoltaic (PV) leading at 7.4GW and wind power contributing 6.2GW. The Northern Cape has emerged as the country’s renewable energy hub, hosting close to 60% of installed solar PV capacity.
However, the report identifies significant transmission constraints as a major risk. Grid bottlenecks, particularly in the Cape provinces and the Northern Corridor, threaten to delay large-scale projects. Eskom’s Generation Connection Capacity Assessment indicates that no new capacity is available in the Northern, Eastern and Western Cape until after 2027, underscoring the urgent need for transmission infrastructure upgrades.
Localisation and skills development critical
SAREM outlines ambitious localisation targets: 50% local content for solar, 47% for wind, and 60% for battery storage by 2030. The masterplan also aims to increase employment in renewable component manufacturing tenfold and boost youth and female participation in the value chain.
Yet the report warns that skills shortages in engineering, project management and operations remain a critical constraint. “Without adequate skills development aligned with the Just Energy Transition, localisation strategies will falter and investment will be underutilised,” the report states.
The recently launched JET Skills Desk and initiatives like the PowerUp platform are designed to coordinate curriculum design, vocational training and alignment with emerging industrial demand.
Green hydrogen: the next frontier
The report highlights green hydrogen as a parallel opportunity that could anchor new industries and export markets. SA’s green hydrogen programme has already attracted projects worth an estimated R800bn, with the SA-H2 Fund deploying R355m in development finance for flagship initiatives like the Hive Coega Green Ammonia Project.
“Green hydrogen positions SA not just as an energy producer, but as a potential exporter of low-carbon industrial commodities. This diversification will be essential for long-term competitiveness,” says Oosthuizen.
Risks and strategic priorities
While optimism prevails, the report identifies several risks:
- Grid constraints limiting project deployment in high-resource areas.
- Policy uncertainty creating investment hesitation.
- Delayed transmission expansion threatening timelines.
- Social pressures linked to coal phase-downs in mining-dependent communities.
To address these challenges, Oosthuizen recommends five strategic priorities:
- Fast-tracking grid expansion through innovative financing structures.
- Consolidating regulatory certainty with timely IRP updates and consistent REIPPPP rounds.
- Mobilising blended finance through expanded green bond issuances and climate funds.
- Anchoring localisation by embedding SAREM targets into procurement design.
- Diversifying technology through battery storage, green hydrogen and new energy vehicles.
Outlook to 2030
The BDO report projects that renewable energy could contribute over 30GW of installed capacity by 2030 if procurement schedules and private investments are realised. This would effectively double renewables’ contribution to the national energy mix.
“The coming years will be decisive,” Oosthuizen says. “Coherent execution of reforms could cement renewables as the backbone of a resilient, inclusive, and competitive economy. But failure to address infrastructure bottlenecks and policy execution risks could see this momentum stall.”
The report emphasises that SA’s energy transition is not just a sustainability story. It is becoming a fundamental pillar of the country’s economic recovery strategy, with the potential to support over 50,000 direct and indirect jobs by 2030 while contributing materially to carbon reduction targets.
Click here to read the full BDO SA 2025 Renewables Report.
This article was sponsored by BDO SA.
