SA clean energy industry shaping up

The plans by German firm, SMA Solar Technology AG (SMA), to establish a production facility in South Africa has boosted hopes that the country may realise its ambition of becoming a regional renewable energy industry centre.

SMA announced this week plans to establish an inverter production facility in South Africa which feeds the country’s ambition of localizing while rolling out a massive renewable energy program. South Africa launched its renewable energy independent power producer (IPP) program about two years ago.

Expected to deliver renewable power into the national grid, the program is expected to fetch about R100m in different phases. South Africa’s path has been noticed by global watchers. In its latest report, the Pew Charitable Trusts said South Africa was the fastest-growing clean energy market within the G20 in terms of investments received in 2012. The independent non-profit think tank, Pew Charitable Trusts, calculated that investments flowing into South Africa’s clean energy increased from less than $30 million in 2011 to $5.5 billion in 2012 which shows the take-off of the state driven renewable energy IPP.

South Africa is planning to use this program to develop a permanent and export orientated renewable energy industry. This is feasible given the fact that South Africa is scheduled to be ahead of the entire African continent on this front. Local players are positioning themselves to participate and exacting pressure for higher localization and black economic empowerment (BEE) targets.

Ajay Lalu, a principal of Black Lite Energy warned that the funds said to be flowing into South Africa’s renewable energy sector would live in foreign accounts if more stringent localization requirements are not applied. Black Lite Energy has been working with

with German firm Manz AG to establish a multibillion rands thin film solar panel manufacturing facility in the Easter Cape. Lalu said South Africa must ensure to maximize from the ensuing massive renewable energy program. The country must ensure that it participates on big ticket items, not peripherials, around the renewable industry.

SMA said it decided to enhance its presence in South Africa due to the potential shown by the country’s renewable energy industry. “South Africa has strategic importance for SMA,” said SMA Chief Executive Officer Pierre-Pascal Urbon.

Inverters are a critical part of solar energy, photovoltaic power plants to be precise. Inverter is the component that converts power from solar panels to be injected into the national grid.

With the issuing of several solar farm licenses over the past few months and with more to come, South Africa has emerged into a critical market for this technology.

“SMA’s decision to establish an assembly line in South Africa is testament to the growing potential for solar power in the country and around the region,” said Johan Cilliers, First Solar’s regional director for Sub-Saharan Africa. The US headquartered provider of PV solar systems, First Solar, established presence in South Africa in 2012 in pursuit of opportunities arising from the country’s renewable energy IPP program.

Laura Luckhurst, First Solar’s Business Development Manager for Sub-Saharan Africa added that “As South Africa and other countries in the region start to ramp up their adoption of solar power, the presence of local technical facilities adds tremendous value in terms of sourcing best-in-class technologies. SMA and First Solar share a longstanding relationship and we look forward to building on our partnership in the region.”

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