Does an importer of cheap solar water heater devices have an unfair advantage over local manufacturers as they both receive the same subsidy from ESKOM?
This is an extract from an article by Brindaveni Naidoo that appeared in Engineering News on 11/11/11:
"Regulatory constraints, costs and cheap imports are putting strain on local solar water heater (SWH) manufacturers in South Africa, the Sustainable Energy Society of Southern Africa (Sessa) ambassador Irvan Damon said on Friday.
Local SWH manufacturers say they struggle to survive under the Eskom rebate programme, and that it has attracted new entrants to the market, mainly importers, without stimulating demand in the same way.
The difficult operating environment has already led to the closure of the SWH manufacturing facility of Western Cape-based Solardome South Africa. The company was established in 1969, and will now retrench 21 employees.
Solardome MD Tertius Lindenberg said imported products had flooded the market, and believed not enough was being done to protect local manufacturers and ensure a competitive local industry. He said the demand for SWH in South Africa did not justify the costs absorbed by manufacturers. Another Western Cape-based manufacturer, SolarMax, MD Jacques van Dyk also warned that his business would have to close its manufacturing facility next year, if conditions did not improve.
A manufacturer can pay between R70 000 and R100 000 to have a system (solar water heater and the geyser) tested by the South African Bureau of Standards to qualify for the current Eskom rebate programme.
Should any components to a system change, the entire system had to be tested and not just the added component/s, Lindenberg lamented. This also restricted businesses from diversifying their product portfolios, as companies did not have the money to pay for any configurations to products, Van Dyk added.
Damon said smaller SWH companies that purely established their businesses’ bottom line on the premise of the Eskom rebate system would find it difficult to survive. Demand remained low and the market could only absorb 50 low-pressure SWH a month, he said, adding that large SWH companies with the capacity to produce up to 10 000 units a month, were now only producing one-tenth of this amount.
Manufacturers are advocating for the Eskom rebate to be offered only to local manufacturers’ products and not for imported products.
What is your view? Should importers, who do not provide local jobs, enjoy the same subsidies?