The current focus on solar power and the renewable energy sector could enable “the supply of energy at a massively reduced rate,” said chairman of Solar Capital Paschal Phelan on Monday.

Referring to South African Minister Pravin Gordhan’s February budget speech, Phelan said he believed that solar energy would be the most affordable form of energy in the country.

“Not only is solar energy readily and freely available, but the cost of solar technology internationally and locally has come down substantially in the last few years,” said Phelan.

He said this was due to a combination of factors such as technological innovation, the manufacturing learning rate, economies of scale and competition driving prices down.

Phelan said the rising cost of electricity, in tandem with Eskom’s recent 9,4 percent tariff increase would put pressure on the country to invest more in renewable energy, in particular solar, which provides energy at a substantially lower cost to coal.

He illustrated the cost differences of water usage at the Medupi and Kusile coal stations, which according to a Frost & Sullivan report cost R2,35 and R1,94 per kilowatt hour (kWh) respectively.

Phelan added that construction costs for the two coal stations were costing the country billions, which had a “negative effect on our struggling economy.”

In comparison, he said that solar power could be produced at a cost of under R0,70 per kWh.

Phelan said the price of solar energy “is fixed for a period of 20 years, making the cost saving consistent and predictable”.

This, he said, could play a role in preventing future electricity tariff increases.

Looking at the country’s Renewable Energy Independent Power Producer Procurement Programme, which aims to generate 10,000 gigawatt hours (GWh) of renewable power generation to the electricity grid by 2030, he said much could be achieved within the renewable energy sector to drive the economy and create energy savings.

Phelan said Solar farms, which do not need government funding and guarantees, were “commercially viable” and an attractive investment alternative and a “source of abundantly free, green, sustainable energy.”