Demand for solar panels, batteries and inverters in South Africa goes into hyper-drive every time Eskom announces load-shedding, creating sporadic shortages in the local market, Ellies Group CEO Shaun Prithivirajh said in an interview yesterday.
He said Ellies, along with other distributors, was faced with substantial difficulties in importing the equipment because of the very high demand for such products globally, substantial supply chain disruptions emanating from the impact of the Covid-19 pandemic on global industry, the weakening rand exchange rate, and “when we are finally able to get some panels, we are short of being able to get inverters, or short of batteries.”
Ellies imports all its alternative energy products for the local market. He said the problem was exacerbated by the local market where demand spikes sharply when Eskom was load-shedding, interspersed with periods when Eskom was supplying enough power, and demand for the equipment then drops.
Prithivirajh said even if a local solar panel, battery and inverter industry of sufficient volumes were to be established in South Africa, the equipment contained many components that would need to be imported, and “you are back to the very same problems as when you started”.
In addition, solar panels had become a global commodity item, so any local manufacturer would have to produce substantial volumes to meet local and global pricing levels.
He said the current lead time between ordering the equipment from China and it being available in South Africa was six weeks.
“What happens during this period when there is severe load-shedding and we run out of stock. And then we order more, but then loadshedding abates for a long period again.
He also pointed out that 41 cities in China were on full Covid-19 lockdown, and it would take time for factories in those cities to resume production sufficient to be able to export to other markets again.
“For us the problem doesn’t end there because keeping large stocks ties up our capital, and third parties need to be paid for storage and distribution, adding to prices. There is a limit to what consumers will pay, so the equipment has to be price competitive,” he said.
He said current market conditions, and financial circumstances, had forced local distributors of alternative energy equipment to collaborate to meet these challenges.