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In response to the Royal Danish government’s plans to donate R60 million toward renewable energy projects at the local government level in South Africa, which will help fund a number of projects including wind energy and methane gas capture at landfills, Frost & Sullivan stated that some of these funds should be put toward the support of solar energy. The company noted that there is great potential for solar energy in Africa; however, response has been limited due to high equipment costs.

Frost & Sullivan energy industry manager Cornelis van Der Waal announced his support of Denmark’s aid to South Africa, stating that it will allow previously impossible renewable energy projects to now be developed, which will in turn inspire additional future projects. He also outlined his hopes for solar power projects such as solar-powered traffic lights and the installation of solar panels in new housing developments.

"In South Africa, solar energy is still primarily used for off-grid applications," said van Der Waal. "This is because of the lack of a feed-in-tariff for individual users. On a commercial scale, wind is certainly more attractive than solar, simply because of the magnitude of the electricity that can be generated through wind."

van Der Waal cited the lack of incentives as the reason for private individuals and institutions not taking advantage of the wide supply of open space for solar power, such as on rooftops for photovoltaic panels or solar water heaters.

"The biggest challenge in the solar market in South Africa has been the lack of government support for individuals to purchase equipment and supply any excess power they might generate to the grid," notes Van der Waal. "In countries like Germany and Spain, government support for this approach has been significant."

Although the National Energy Regulator of South Africa (Nersa) has proposed such incentives, there is no indication as to when they will be implemented. It has been said that the suggested feed-in tariffs may not be high enough to inspire substantial interest. The government has set a target of 3% of all power to be generated by renewable sources by 2013, though this has been criticized as too weak.