Page 33 - Energize July 2021

VIEWS AND OPINION

Keeping it local: How we can make the

most of South Africa’s solar PV sector

by Niveshen Govender, SAPVIA
here has been much debate around the removal of the local-content requirement on aluminium
frames for photovoltaic panels by the Department of Trade, Industry and Competition (DTiC). The
Tdecision has caused questions to be asked of DTiC but should also cause us all in the industry and
government, to reflect on what local content really means.
Looking back at the progress we have made since the 2011 launch of the Renewable Energy
Independent Power Producer Procurement Programme (REIPPPP), I can see so many positives.
Recognising that our own local industry was not able to fully realise the ambitious programme
targets, government took an innovative stance designed to leverage foreign expertise and at the same
time provide South Africa with the opportunity to become a major manufacturer of componentry of Niveshen Govender
renewable energy projects.
The local content requirements of the initial Bid Windows of the REIPPPP stipulated a certain
percentage of local content and have resulted in several technology and component manufacturers identifying and maximising industrialisation
establishing local manufacturing facilities. and employment opportunities from the
implementation of IRP 2019, under the
Current situation leadership of the Department of Mineral
According to the Independent Power Producer Office’s (IPPO’s) quarterly report, black South Africans Resources and Energy (DMRE) and DTiC.
now hold 33% of the shares across the complete supply chain and local communities hold 9% equity With the aim of contributing to a
in the Independent Power Producers (IPPs) of Bid Windows 1 to 4. meaningful definition and position of local
To date, the R58,5-billion local content spend reported by active IPPs is already 89% of the content as it relates to government-led
R66-billion local content expected. This is with 20 projects still in construction, and 71 of the 91 procurement programmes, this Working Group
active projects having reached Commercial Operation Date (COD). elected officials (Frans-Willem Vermaak and
Lourens Vermaak) to represent their collective
What is really meant by “local” content? interests at the South African Renewable Energy
All this is to be lauded. However, as I reflect on progress, I must ask, what exactly is meant by “local” Master Plan (SAREM) level.
when it comes to local content requirements?
As with everything in life, there is often a happy medium between opposing viewpoints, so this Join us
might be an appropriate time to reassess what it is we want from local content requirements as we I would actively encourage as many players
embark on another decade of renewable energy procurement. as possible from across the industry to come
Our definition of local should of course be aligned with government objectives to increase domestic together through this Working Group to allow
employment through increased industrialisation. But local content should also lead to an enhanced us to formulate an industry position that will
skills base that leads us to leverage foreign expertise, to improve the knowledge of our local workers help us tackle the challenges facing our industry.
and enable them to add value across the solar PV value chain, not just through manufacturing and Together we will map out the component
construction, and in the process hopefully develop globally competitive products. manufacturing, supply, and distribution
landscape in South Africa. Through a thorough
South African reindustrialisation review of policy, technical and lender
Renewable energy provides us with an opportunity for industrialisation. The South African Photovoltaic requirements for local manufacturing, we
Industry Association (SAPVIA) is fully supportive of localisation that builds industry in South Africa in line would be better able to align with industry
with the national policy. The framework must support fair and transparent opportunities to both local capability. We will engage key policy makers
manufacturers and foreign investors. to ensure an enabling environment for local
There are several solar PV system components which could be locally manufactured if the right manufacturers and support further investment
conditions were put in place. We have a great untapped potential on the African continent for which we in industrialisation.
could manufacture equipment. A key ambition for any local content
All of this must be done responsibly and sustainably, with an eye on balancing the immediate needs requirement must be to increase skills
of the sector while encouraging investors and incentivising viable local businesses and industry. transfer and development and we intend to
A refocus on what constitutes local content requirements can only be done through open engage with the relevant SETAs to include
consultation both nationally and internationally, working with private industry and government to and encourage youth participation and
ensure that we have empirical, data-based research as the cornerstone of any plan. employment within the industry.
Local content calibrations should begin with an assessment of existing local capabilities and the By interacting with other industry groups,
market potential, while keeping an eye on the planned roll out of capacity – mainly, the IRP 2019. our hope is to create a more collaborative sector
that will lead to the increased rollout of solar PV
Partnerships in South Africa.
Going forward, we are keen to continue working with the DTiC and other organisations representing There is always a balance to be struck and
the renewables and manufacturing sectors to fully understand the local market potential, currently, compromises that sometimes must be made.
and what it can grow into. Only through research and consultation will we be able to chart a forward However, by working together, we can make
trajectory that supports increased investment in industrialisation and fosters healthy local competition. sure that future local content requirements
SAPVIA is working hard to create an enabling environment that supports manufacturers. We really address the needs of the market and
have reconstituted a Manufacturing Working Group, for both members and non-members, which has support long term policy objectives of both
representation from various solar PV component manufacturers, suppliers, and distributors, both local government and industry in the short, medium,
and international. and long-term.
This Manufacturing Working Group, under the leadership of its own chairperson, Patrick Govender,
and vice chairperson, Conrad Harmse, will focus on specific issues that relate to the development Contact Kim Thomas, SAPVIA,
of local PV supply-chains, supporting the South African Renewable Energy Masterplan’s focus of Tel 021 200-5856, kim@sapvia.co.za

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