By David McDonald, CEO at SolarAfrica
If you happen to ever end up sitting round a C-suite trade dinner desk, you’ll quickly discover that because the recent-ish abolition of loadshedding (lengthy could it final!), the power dialog is usually full of optimism, dominated by huge concepts and peppered with daring timelines.
However for those who’re on the bottom, that the market strikes in its personal time, and in a much more sensible approach. The realities shaping 2026 aren’t predictions or coverage aspirations, however they’re already enjoying out in how initiatives are financed, how municipalities procure energy, and the way companies take into consideration power danger.
Listed here are 5 power market truths that can inform how we, as an trade, function in 2026.
The wholesale market nonetheless hinges on Eskom – and that hasn’t modified
Over the previous yr, there was a substantial amount of discuss across the South African Wholesale Electrical energy Market (SAWEM), coupled with phrases reminiscent of “prepared”, “milestones” and “imminent”.
However whereas it would sound, on paper, like we’re about to press play, the truth is that with out all stakeholders’ participation, a wholesale market gained’t operate. At the moment, whereas Eskom helps the idea of an open market, it nonetheless seems to be hedging its bets by constructing and controlling its personal digital wheeling platform. And personal off-takers and Unbiased Energy Producers (IPPs) will proceed to align themselves – not less than within the brief time period – with the state-owned entity as a result of it’s the place bankability exists.
That is important as a result of key stakeholders reminiscent of builders, prospects and banks are watching and responding to what exists at the moment. Initiatives are being financed and constructed utilizing Eskom-approved constructions, and no person is holding initiatives again ready for a market that will or could not arrive on schedule.
I imagine {that a} wholesale market is in the most effective pursuits of South Africa’s power panorama, and that it’s going to nonetheless play a job in future. However in 2026, most non-public energy exercise continues to take a seat exterior that debate – for now, not less than.
Municipalities shopping for energy immediately turns into the trail of least resistance
Whereas 2025 has proved that wheeling is viable at scale and provides a mess of benefits, many municipalities are selecting a extra simple route: shopping for energy immediately from IPPs.
Within the Western Cape, Swartland and George are two current examples of municipalities which have acknowledged their intention to supply electrical energy immediately from energy producers, whereas in KwaZulu-Natal, eThekwini Municipality was the primary SA metro to safe ministerial approval to purchase important capability from IPPs.
For them, wheeling brings administrative and monetary complexity, whereas direct procurement – then again – is less complicated to implement and more and more simpler to finance. Furthermore, adjustments to Eskom’s Electrical energy Provide Settlement have made these constructions extra rigorous and, in some instances, tougher for municipalities to navigate.
Consequently, anticipate the market to turn out to be much more fragmented in 2026.
Vitality choices transfer out of operations and into the steadiness sheet
In 2026, power is now not handled as solely an operational price; for a lot of giant customers, it now strikes onto the steadiness sheet and into the chance administration operate.
Electrical energy is likely one of the few main prices companies can truly repair over a protracted interval, which is why power conversations are more and more occurring with finance and danger groups (not simply the sustainability and engineering individuals).
We see this clearly in industries reminiscent of mining. Electrical energy is seen as one in all mining’s largest enter prices, and in some instances, uncertainty round future pricing is delaying capital funding. Whereas issues like commodity pricing and market volatility can’t be managed, a mine does have management over their power technique, which is the place companions who can construction blended power options have an more and more very important function to play in 2026.
Fastened and capability prices begin to change the panorama
As self-generation will increase, municipalities and Eskom are more and more reliant on fastened and capability prices to guard income, which adjustments the panorama considerably. In future, it’s probably that capability prices will improve at a far quicker fee than consumption prices.
What does this imply for 2026? Anticipate main gamers within the power trade, reminiscent of SolarAfrica, to innovate and get smarter about managing peak demand and capability publicity in a bid to cut back prices for our prospects. Suppose batteries, hybrid provide fashions, diversified power stacks and the flexibility to produce energy exterior normal photo voltaic hours to turn out to be extra prevalent.
Wheeling works – however financing remains to be catching up
In 2025, we proved that wheeling works – and within the case of SolarAfrica’s SunCentral, first energy is predicted to return on-line later this yr. Nevertheless, in 2026 we’re seeing extra merchants enter the power buying and selling pool, extra off-takers and extra complicated constructions. These are placing strain on banks which can be nonetheless geared for easier, single-buyer offers. Reaching monetary shut on these initiatives is already taking longer than builders would love, and this pattern is about to proceed.
However this gained’t be the case perpetually: as extra multi-tenant initiatives come on-line, banks could have entry to higher knowledge, which means that danger will turn out to be simpler to cost.
For now, you’ll be able to anticipate the size and rigidity of the monetary shut course of to provide many builders a couple of gray hairs.
ABOUT SOLARAFRICA:
Based in 2011, SolarAfrica offers a collection of capex-free inexperienced power options to the business and industrial sectors in Southern Africa. The holistic suite consists of on-site options reminiscent of photo voltaic power and battery storage along with digital options like wheeling, buying and selling and aggregation.
SolarAfrica companions with companies in South Africa in search of an power resolution that gives energy safety, price financial savings and carbon discount – constructing in direction of long-term sustainability.
The corporate has developed into an formidable crew who’re enthusiastic about what they do and the core values they uphold. SolarAfrica has been named the continent’s main photo voltaic power agency twice, scooping the Africa Photo voltaic Business Affiliation’s African Photo voltaic Firm of the 12 months award in 2021 and 2023.
