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South Africa: Industry Cluster MANCOSA Calls for Quick Action

Submitted by Baerbel Epp on August 17, 2015
MANCOSAMANCOSA, the Solar Water Heating Manufacturers Cluster of South Africa, is raising its voice in the interest of the local solar thermal industry which has been left in a precarious situation following the termination of the Eskom rebate programme in April 2015. “The Department of Energy has let pass the self-announced deadline of July 1 without any announcement of a successor programme and has not even published any new time frame yet,” said Mike Breckenridge, Chairman of MANCOSA and Managing Director of collector manufacturer and system supplier GAP Holdings. “The industry needs a reliable framework for future investments.” 
 
In an interview with Engineering News Online, Breckenridge summarised the most important arguments in favour of quick actions to reactivate the solar thermal market:
  • The national target of 1 million solar water heaters by March 2015 failed, with only about 425,000 solar water heaters having been installed so far.
  • The Sustainable Energy Society of Southern Africa (SESSA) has estimated that SWHs could remove about 18 % of Eskom’s baseload and save up to 15,000 MW of peak demand.
  • According to SESSA´s estimate, the solar thermal sector – manufacturing and installation – has lost around 4,500 jobs over the last months.
  • The solar thermal industry needs a strong national market to extend the export business in the region. 
MANCOSA sees two major issues in need of being resolved in the near future: first, starting the next national incentive programme under the administration of the Department of Energy (DoE) and second, effectively implementing the 70 % local content requirement for state-financed solar water heaters.
  1. Breckenridge advocates the latest proposition of the DoE to work more closely with the insurance industry when subsidising newly installed solar water heaters. The idea is that insurance companies would receive the subsidies, so that they can recommend their clients a solar water heater with a higher price than an electric water heater in case the existing boiler is broken. The initial target would be to have 10 % of the 40,000 monthly geyser replacements exchanged for solar. 
  2. The second crucial issue refers to the requirement of the Department of Trade and Industry (DTI) which mandates 70 % of local content for tanks, as well as collectors to qualify for public procurement programmes, such as the government solar water heater rollout programme. Solar water heaters based on vacuum tube technology are one unit with tank and tubes and cannot be viewed separately, so this is a contradiction in the regulation resulting in a lot of solar thermal system suppliers not being able to qualify for subsidy schemes or tenders. “We should exclude the tubes from the regulation and change the requirement to a 70 % local content for the entire system,” suggested Breckenridge. “We are receiving strong support from the DTI, which is keen to encourage domestic solar geyser manufacturing.”
MANCOSA was founded in February 2014 under the roof of the South African Capital Equipment Export Council (SACEEC). Currently, seven solar water heater manufacturers are members of the organisation: GAP Holdings, Franke Water Heating Systems, Heat Tech Geysers, Kwikot, Satchwell, WE Geysers, Xstream Solar Hot Water Cylinders and Powerz-on Solar Solutions – claiming to represent 90 % of the solar thermal industry in South Africa and offering 2,000 full-time jobs in manufacturing. GAP Holdings is the new name of former solar water heater manufacturer Geyser Allied Products, which was acquired by Powerz-on at the beginning of August. Both companies trade individually and are members of MANCOSA.
 
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