S Africa solar power sector is booming but lacks localisation
ARTSOLAR, South Africa’s only locally owned solar panel manufacturer, says a small increase in price is a low price when compared with the artificially low price of imported panels.
Fly by night installers offer no back up and do not register the installations with the municipality. They tend to not comply with the globally accepted quality standards for solar installations. This causes major safety issues and would make installations non-compliant overall, especially for insurances purposes.
South Africa’s utility scale projects are using foreign solar equipment with the result that the few local solar panel manufacturers that there were have gone out of business over the past decade, in spite of the worsening energy crisis that has seen a boom in solar installations.
About R24 billion’s renewable energy equipment was imported last year.
Artsolar GM Viren Gosai said in an interview with Business Report that another factor often not considered is the carbon cost of solar component manufacture, with the raw materials mined or sourced from Africa, transported to Europe or China for manufacture, and then transported back to South for installation.
“It makes sense that we make as much of the installation locally, as close to the installation as possible,” said Gosai.
Large solar projects in South Africa were finding as many ways as possible to counter local content policies, when in fact it was in their interests to source as much as possible of the installation globally.
Artsolar, aware that the local market is too small to compete with manufacturers in the US, China and India, is able to compete because it sources components and raw materials from overseas partners, and derives the cost benefits from their joint economies of scale.
Gosai said local manufacture was the only way to resolve the problem of long term sustainable employment, to develop a sustainable solar power industry sector, and of developing the skills required for a growing renewable energy sector.
He said imported solar panel prices were currently very low compared to a year ago, when the market was affected by silicon shortages and there was a constricted supply in the global market. There was currently an oversupply of panels globally that was lowering prices to unsustainable levels considering the input costs, he said.
The low prices were causing a shutdown of many smaller manufacturers around the world, but it would not last forever and was bound to rise again.
He said solar power equipment entered South Africa duty free, and exporters of finished products from some countries also received a rebate on their exports. Most countries that had started to manufacture solar equipment had strong localisation policies in place, which were strictly enforced to protect their local industries, said Gosai.
“For how long can we pretend that unemployment is not a real problem? For how long can we remain optimistic about the recovery of our national grid? For how long can we look the other way while cheap, imported products are ‘dumped’ in our country? Once we get serious about addressing these issues, only then can we commence the building process. One such catalyst is local solar panel manufacturing. If we can build within, we don’t need to look outside.”
He said that while solar cells might be difficult to manufacture locally and required billions of dollars to research and develop, most of solar power installations could be sourced competitively in South Africa.
“If the global lockdowns have not opened our eyes, then nothing will! We need to build local industries and move away from global dependence. Africa needs African solutions, not pay for the rest of the world to take our resources in exchange of ‘hand me downs’,” he said.