Cape Town - The solar water heater industry says the Department of Trade and Industry (DTi) has “fundamental misunderstandings” about the industry, and has called on the government to scrap the red tape that has brought it to a standstill.
In a statement released on Tuesday, the industry confirmed that about 6 000 jobs in the installation and local manufacturing of solar water heaters had been lost in the last two years, and that about 30 000 locally made low-pressure solar geysers had been “sitting in warehouses” for the last 18 months.
A large number of SMMEs, set up to install and service the national target of 1 million solar water geysers by this year, either had to cut staff or had gone out of business.
The industry said the DTi had been made fully aware of the situation in August 2013. There had been several meetings between the industry’s representatives and senior DTi officials, and Trade and Industry Minister Rob Davies about the matter.
The statement by Sustainable Energy Society of South Africa (Sessa), which represents about 400 solar water geyser manufacturers, was released in response to the DTi’s media release on Sunday, in which the department dismissed what it called allegations that the government’s local content rule had destroyed the solar water heater industry.
DTi spokesman Sidwell Medupe said on Tuesday that the department would not comment on Sessa’s statement, adding that it stood by its statement made on Sunday.
The industry had said the central problem was that the government has ruled that both the tank of a solar water heater and the collector – the section which absorbs the sun’s radiation to heat the water – must each have 70 percent local content. The collector on low-pressure heaters can be a flat plate or an evacuated tube.
“The stipulation that two components, the tank and the collector, had to have local content levels of 70 percent each came as a surprise to the industry in July 2013,” said James Green, chairman of Sessa’s solar water heating division.
He said the South African Bureau of Standards had tested and passed about 46 low-pressure solar water systems by the end of 2012. “The overall local content value was typically in excess of 75 percent for these locally manufactured systems.”
The industry wanted the government to set local content at 70 percent for the entire product as the tube collectors were not made locally. Manufacturers could not compete with the subsidised Chinese imports. Flat-plate collectors were made here, but were more expensive, less efficient on low-pressure systems and were not freeze-proof.
“Investment into additional local manufacturing is only viable if certainty exists in the market.
“Evacuated tube factories require significant investment and will have to compete with imports from China, whose manufacturers benefit from subsidies,” Green said.
The bulk of the jobs was not in manufacturing but in installation and maintenance, at a ratio of five to one. “Sessa believes it is essential to remove the obstacles to what promises to become a vibrant industry,” Green said.
Cape Times