The South African Photovoltaic Industry Association (SAPVIA) has welcomed Enertronica Santerno’s decision to expand its solar PV component manufacturing capacity in SA.
The Italian firm will invest up to R17 million ($1,188m) to enhance their capability to manufacture inverters for solar photovoltaic applications, including storage solutions with a maximum initial production capacity of more than 500MW a year, gradually ramping up to higher capacity targets.
Luigi Gerra, Enertronica Santerno country manager for SA, said they are currently exploring three possible sites in Gauteng and a final decision will be made soon about where to position the new plant.
Welcoming the news Niveshen Govender, SAPVIA COO said this significant investment shows the massive potential for the solar PV market in South Africa: “The fact that we are attracting international investors shows the viability of our renewable energy sector, both in terms of financial return as well as the capability of our workforce to deliver best-in-class manufacturing.
“Post-COVID-19, we will require foreign and local investment to drive the economic recovery and transform our energy infrastructure to meet current and future requirements. This investment will also contribute to South Africa realising the full, transformational potential of its solar PV market.
“Localisation, upskilling and a focus on ensuring true South African participation across the value chain is vital if we are all to benefit from the full rewards of the REIPPPP,” said Govender.
Guerra pointed out the Group has been in-country since 2013 when they built a production plant for the manufacturing of supporting structures for photovoltaic panels which supplied steel works for around 400MW of panels, which was then subsequently dismantled.
Localisation of solar PV manufacturing scene needs government support
Speaking with ESI Africa, Guerra said the SA energy scene is now a completely different sector, but having a manufacturing plant active in country requires a reliable and stable source of potential work.
“Although the REIPPP programme proved to be of extreme advantage to the country, it still has its problems both in terms of expected turnaround time and transparency which are somehow affected by the lack of de-regularisation of the energy market.
“The recent announcement by President Cyril Ramaphosa to raise the licensing threshold for embedded generation plants to 100MW allows for a step forward in the right direction, but it is still not sufficient as, from our point of view, a real breakthrough will be achieved when IPPs will be able to configure themselves as private distributors.
“We also believe that additional opportunities should be granted to foreign companies that decide to localise their manufacturing activities in terms of opportunities/chances to temporarily relocate workforce from abroad with the scope of assisting and training local workforce in achieving the expected quality of work.
“We unfortunately witness several cases of products and critical components branded by multinational companies that were affected by unexpected defects due to lower local production standards which, inevitably, calls for an investigations of the skills of the local workforce,” said Guerra.
Policy certainty will go a long way towards growing a local RE industry
For the new manufacturing plant Enertronica Santerno will source materials locally and subcontract the manufacturing of some sub-assemblies, perform the assembly and commissioning of the units locally.
“It is understood that some of the internal components will still be sourced abroad due to the IP involved and due to the criticality of the same in the core business of the mother company. As a plus, we will be able to repair units locally, further contributing to the creation of localised job opportunities and also cutting down the turnaround time for repairs for products which are sold by third parties,” said Guerra.
Govender pointed out South Africa’s energy sector is waiting for confirmation from the Department of Mineral Resources and Energy and the Department of Trade Industry and Competition that legislation would be implemented to ensure local projects are able to meet localisation requirements for Bid Window 5 of the REIPPP programme.
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“Following the extended pause in government procurement of clean, affordable RE generation infrastructure through the REIPPPP, we are starting to see confidence growing from industry who now feel ready to invest in local manufacturing.
“After a period of decline, where investors felt hesitant to move forward with local manufacturing, due to the lack of certainty from government, we are now seeing the green shots of a South African RE manufacturing sector. With this confidence, we hope to see additional investment, local job creation and of course upskilling of local workers,” said Govender.