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Solar industry calls for SA ‘data-driven policy implementation’ after Patel changes plan for local content quotas

The roof of a commercial building in Pinelands was fitted with solar panels. Picture: Armand Hough African News Agency (ANA)

The roof of a commercial building in Pinelands was fitted with solar panels. Picture: Armand Hough African News Agency (ANA)

Published Aug 3, 2022


The domestic solar PV industry has called for “data-driven policy implementation” on local content requirements by renewable energy producers, which will be appointed for additional electricity capacity to the grid.

This comes after Trade, Industry and Competition Minister Ebrahim Patel announced late on Monday the cutting of red tape on solar projects in a bid to end load shedding.

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Patel said that, under Bid Window 5, bidders would now only need to get 35 percent of their solar photovoltaic (PV) cells from local suppliers when previously it was 100 percent.

This meant that the remaining 65 percent of the solar PV panels could be imported as the local industry might not be able to fully realise the ambitious programme targets.

Several actions are being taken to address the shortfall in electricity supply, including procuring a further 6 800MW of solar PV and wind power to be connected to the grid from late 2023.

The South African Photovoltaic Industry Association (Sapvia) said yesterday that it trusted that the deviation from the 100 percent was a result of consultations with all relevant industry stakeholders.

Sapvia spokesperson Maloba Tshehla, however, said this development reinforced their two-year stance that the government needed empirical data on where the industry was best positioned to localise the value chain and the conditions required to do this.

“Our localisation study should shed light on current local capabilities and which components can be localised and to what economic development benefit,” Tshehla said.

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“We, therefore, continue to make the call for data-driven policy implementation and are keen to make our inputs in all forums dealing with expediting renewable energy roll-out, to ensure that we maximise localisation as we address our energy security needs – short and long-term.”

There has been much debate around the removal of the local-content requirement on aluminium frames for PV panels as the government decided to leverage foreign expertise, but also provide South Africa with the opportunity to become a major manufacturer of componentry of renewable energy projects.

However, the founding director of African Quartz Photovoltaic (AQP), Dr Dennis George, was aggrieved yesterday, saying the government had not consulted the industry about this move.

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“As for the government to go and make an announcement like this, what they are actually doing is to create jobs in other countries,” George said.

“We have high unemployment in this country, and anyone can now go and import these from overseas and flood our market with these panels.”

AQP is investing R1.5 billion on a modular production line to manufacture 500MW of solar modules (panels) per year in the Saldanha Special Economic Zone, which can create jobs for at least 200 workers.

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“The last time we had a similar problem when Jacob Zuma was president, a number of solar panels companies closed down because the government does not plan properly,” George said.

“(But) we are going to continue putting our investment in place. We are going to work hard to find orders from overseas companies.”

The government’s energy crisis committee has announced plans for Eskom to quickly add nearly 2GW of electricity generation capacity to the grid through buying 1.6GW of surplus supply from Independent Power Producers, importing up to 200MW from neighbouring countries, and getting about 150MW of gas energy from Mozambique.

Anchor Capital investment analyst Seleho Tsatsi was not fazed by the plan, saying it would unfortunately not be enough to cover Eskom’s supply shortages.

“The proposed plan will add 1 950MW. It looks like load shedding will continue to be a part of our lives at least in the immediate future,” Tsatsi said.

“The removal of the cap on the generation of energy by private sector players is encouraging but the supply shortage will continue at least for now.”

Like clockwork, Eskom yesterday warned of Stage 2 load shedding at short notice during the evening peak period over the next three days due to a shortage of generation capacity.