Insights from SOLINK Group CEO Oliver Johnston
As Southern Africa’s renewable energy market matures, 2026 is emerging as a pivotal year. Falling technology costs, tightening grid constraints, and evolving market structures are reshaping how projects are designed, financed, and operated.
According to SOLINK CEO Oliver Johnston, the industry is entering a phase where flexibility and performance matter just as much as scale.
“We’re moving beyond simply adding generation capacity,” Johnston explains. “The focus is now on how intelligently that power is produced, stored, and delivered.”
Below are the key renewable energy trends Johnston believes will define the year ahead.
Battery Energy Storage Becomes Essential
Battery Energy Storage Systems (BESS) are no longer a future concept — they are rapidly becoming a core component of both utility-scale and embedded energy projects.
“Battery costs have come down to a point where they’re financially viable on a pure arbitrage basis,” says Johnston. “That changes everything.”
Batteries allow energy to be stored during low-cost periods and released when tariffs are highest, creating strong returns for:
- Utility-scale generators optimising grid delivery
- Commercial and industrial (C&I) customers managing time-of-use tariffs
- On-site systems looking to maximise solar production
Just as importantly, batteries are helping the grid itself.
Storage allows us to get far more value out of existing grid infrastructure, especially in constrained nodes.
Grid Constraints Are Driving New Project Strategies
Grid access is increasingly dictating where projects can be built. South Africa’s best wind and solar resource areas were developed first, leaving newer projects to contend with lower-resource regions and limited capacity.
This shift is expected to:
- Increase project costs
- Put upward pressure on energy pricing
- Limit supply if demand remains strong
Battery storage is emerging as a critical response.
Batteries flatten generation profiles, especially for solar, and allow power to be released when the grid can actually accept it.
Wheeling Continues to Evolve
Wheeling remains a key growth area, with increasing momentum around:
- Virtual wheeling
- Wheeling to non-Eskom distributors
We expect to see continued traction in wheeling, particularly outside of Eskom, as the market opens up and matures.
These developments are expanding access to renewable power for large energy users and creating new routes to market for generators.
Policy and Tariff Changes Are Shaping the Market
Recent regulatory shifts have had a material impact on project economics. Grid access allocation has moved from a “first applied” to a “first ready” basis, raising the bar for project readiness.
In addition, South Africa’s Retail Tariff Plan introduced in 2025 significantly reduced wheeling rebates.
“That change reduced the financial benefit of wheeled power, while embedded systems retained their full value,” Johnston notes.
As a result, embedded generation has become increasingly attractive — although Johnston emphasises that the most effective strategies often combine embedded and wheeled power.
Battery Costs Are the Biggest Technology Shift
While solar and wind remain among the cheapest sources of power globally, batteries have seen the most dramatic cost reductions.
Solar and wind were already competitive. The real change over the last few years has been storage.
At the same time, the maturing wheeling market is driving down risk premiums on shorter-term and more flexible power contracts, making them increasingly viable for energy buyers.
Load Shedding’s Legacy: A Focus on Resilience
Although load shedding has eased, its impact continues to influence investment decisions.
The big surge in renewables was driven by load shedding in 2022 and 2023. That urgency has faded, but the desire for resilience hasn’t.
Many businesses now see energy security as a strategic requirement rather than an emergency response.
Risks Developers Need to Address Early
Johnston highlights several risks that project owners should consider from the outset:
- Grid capacity and access
- Permitting and licensing
- Construction quality and partner selection
- Long-term operational performance
Operational performance is often underestimated,” he says. “These are operating assets — if they underperform, returns suffer.
As the market matures, scrutiny on asset performance is expected to increase significantly.
Financing Is Scaling and Diversifying
On the utility side, financing is increasingly focused on large, aggregated projects — often 250MW and above — to unlock economies of scale.
For embedded and battery-based systems, new financing models are emerging, including:
- Fixed monthly lease structures
- Tariff-linked PPAs
- Hybrid PV and battery financing solutions
There’s a lot of innovation happening in how embedded and battery systems are funded. And there’s still more to come.
Hybrid Systems Are Becoming the Default
Hybrid PV and battery systems are quickly becoming the preferred model for both generators and energy users.
Solar is the lowest-cost power source we have. Batteries allow you to oversize PV, target peak tariffs, and introduce real flexibility.
Future-Proofing Through Flexibility
Looking ahead, Johnston believes flexibility will be the defining feature of successful renewable projects.
“Tariffs, time-of-use structures, and market rules will continue to change,” he says. “Battery storage gives developers and offtakers the ability to adapt and protect long-term returns.”
As balancing responsibilities increase and market mechanisms evolve, projects that can shift generation and consumption will be best positioned for the future.
About SOLINK
SOLINK partners with businesses and developers across Southern Africa to design, facilitate, and optimise renewable energy solutions that deliver long-term value. Get in touch to find out more.
