Regulatory constraints, costs and cheap imports are putting strain on local solar water heater (SWH) manufacturers in South Africa, the Sustainable Energy Society of Southern Africa (Sessa) ambassador Irvan Damon said on Friday.
Local SWH manufacturers say they struggle to survive under the Eskom rebate programme, and that it has attracted new entrants to the market, mainly importers, without stimulating demand in the same way.
The difficult operating environment has already led to the closure of the SWH manufacturing facility of Western Cape-based Solardome South Africa. The company was established in 1969, and will now retrench 21 employees.
Solardome MD Tertius Lindenberg said imported products had flooded the market, and believed not enough was being done to protect local manufacturers and ensure a competitive local industry.
He said the demand for SWH in South Africa did not justify the costs absorbed by manufacturers.
Another Western Cape-based manufacturer, SolarMax, MD Jacques van Dyk also warned that his business would have to close its manufacturing facility next year, if conditions did not improve.
“We are ‘hanging on’ and hoping for a positive change to the regulatory framework, including that of the testing of systems, and for protection against imports.”
Damon told Engineering News Online that a further two SWH manufacturing facilities were expected to close shortly.
A manufacturer can pay between R70 000 and R100 000 to have a system (solar water heater and the geyser) tested by the South African Bureau of Standards to qualify for the current Eskom rebate programme.
Should any components to a system change, the entire system had to be tested and not just the added component/s, Lindenberg lamented.
This also restricted businesses from diversifying their product portfolios, as companies did not have the money to pay for any configurations to products, Van Dyk added.
Damon said smaller SWH companies that purely established their businesses’ bottom line on the premise of the Eskom rebate system would find it difficult to survive.
Demand remained low and the market could only absorb 50 low-pressure SWH a month, he said, adding that large SWH companies with the capacity to produce up to 10 000 units a month, were now only producing one-tenth of this amount.
Manufacturers are advocating for the Eskom rebate to be offered only to local manufacturers’ products and not for imported products.
Damon said the country needed to look beyond Eskom to develop a sustainable and competitive market fuelled by demand.
He called on government to take the lead in developing the SWH industry. “Government has over 100 000 public buildings. If there was a strong drive to implement SWH, that could have saved many jobs.”
In fact, Damon said, many more jobs could have been saved if the new energy efficiency building standard was introduced a few years ago.
The SANS 10400-XA, Energy Usage standard, was gazetted on November 9, and requires that at least 50% of the yearly average hot water requirement of all new buildings must be met by sustainable or energy efficient technologies as opposed to electrical resistance heating technology. The standard is to be implemented in tandem with the revised SANS 20 National Building Regulations.
Last month, Eskom integrated demand management senior manager Andrew Etzinger indicated that the utility favoured a transition to a contractual model for the large-scale procurement of low-pressure SWHs, as the current rebate programme was not geared towards industry development, but rather towards encouraging homeowners to switch to solar.
In South Africa’s transition to a green economy, which strongly features renewable energy, national Ministers have on many occasions stated that the growth of the renewable energy industry and green economy must be closely aligned to job creation and developing the local manufacturing industry.