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Solar Water Heating Component Export to South Africa
Adriana HaubAllie CassMaira Da Silva
Alejandra AriasEsther LeeZuri Giang
Group # 2:
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Meet South Africa
• Official Name: The Republic of South Africa • Location: Southern tip of Africa; 2,798 kil. between South Atlantic and Indian Oceans• Capitals: Pretoria (executive), Bloemfontein (judicial), Cape Town (legislative)• Largest City: Johannesburg• Population: 51.19 million (2012 World Bank)• Official Languages: Afrikaans, English• Government: Parliamentary Republic
- President Jacob Zuma (both Head of State and Government)• GDP: 384.3 billion USD (2012 World Bank)• Growth Rate: 2.5% (2012 est.)
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The SWH System Market
Government Incentive and Regulations
Imports are Cost-efficient and Higher Quality
Opportunity:• Higher quality at a lower cost• Customized After-sale Support• Assembled locally• Economy Incentive and Job creation
Issues with current imports:• Systems are big to ship• Difficult to install and maintain• Unfit for local households• No customised after-sale support
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• Component of the collector for the solar water heater system
• Absorbs sunlight and converts it to usable heat
• Top quality borosilicate glass • Inner tubing has a solar absorbing
coating: ensures an optimal and even thermal output under the worst weather condition
• Manufactured in the U.S.• Life expectancy of more than 30 years
Product: Solar Evacuated Tube
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Price and Packaging
• Price ranging from $400 to $500 per set of 100 pipes
- Negotiable• South African Consumer Protection Act• All descriptions, instructions, warnings,
and labeling on the package will be in English
• Indicate details of the official South African service distributor and less about the importer
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Product Service Offering
• Guaranteed No-cost Ten-year Warranty - product service, - technical support - training
• Limited Lifetime Manufacturer’s Warranty
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Target Segment
• Commercial: SWH Manufacturing Companies in Northern Region of South Africa
• Limpopo, North West, and Mpumalanga
• Lowest number of installations• Expected growth with government
program assistance and growth of manufacturers
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SWH Manufacturing Companies
Regions Manufacturing Companies
Limpopo Solar Vision, Solartech Limpopo North
Mpumalanga ASG Solar Solution, Gener-8 Witbank, Solar Focus, Solar Tech
North West Gener-8 Potch
Cities: Johannesburg & Gauteng
Geco Lighting, Genersys South Africa, GoSolar CC, Kwikot (Pty) Ltd
Potential Customers: List of Solar Water Heater Manufacturers in Northern South Africa
Sources: Energy Source Guides and ESKOM
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South Africa’s Demand
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Government Involvement• Government implementing
Programs such as Solar Water Heating Programme.
• These Programs implement and subsidize installation of Solar water systems throughout the country
• Expected installation on 1 million Units by 2015
• 5.6 millions by 2020 Source: Presentation of Raj Pandaram, Eskom, 7 March 2013
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Local Importers
• The majority of Solar Water Heating Systems and its components are Imported Into South Africa
• Local Importers Include Solardome SA, Easy Solar PTY. Ltd, and Enerjetic Distributors
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• China:
- Lower quality materials, cheaper product, not durable, usually 5 year warranty, tubes usually range 200-600 (US Dollars)
• Germany:
- Limited exports, higher price, usually 5 year warranty, tube price from 1000( US Dollars)
Major Export Competitors
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Regulations on SWH Systems
• 2009 National Solar Water Heating Plan- 5.6 millions installations by 2020
• 2009 National SWH Rebate Programme - Supports implementation and development
• South African Bureau of Standards (SABS)- Inspect and certify installed system to be *Eskom
Rebated• 2011 Energy Usage in Buildings
- 50% of hot-water demand MUST come from sustainable source
*Eskom generates 95% of South Africa electricity and implements the Rebate Programme.
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Regulations and Tariffs2011 Preferential Procurement Policy Framework Act (PPPFA) 70% local minimum content threshold SWH components
Importing Solar Evaporated Tube Tariffs • 20% Duty rate/14% sales tax• Export Declaration (SED) required • May be subject to Letter of Authorization (LOA)
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Distribution Channel
● Formal institutions require use of an intermediary● Indirect method using a foreign based distributor● Product and customer characteristics require little control and after
sale service of the component● Pros of using a foreign-based distributor:
- Upfront/direct payment- Avoidance of issues concerning shipping, customs, and
publicity- Knowledge of the local market and its demand
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Distribution Channel
Our Company
South African Based
Distributor
Renewable Energy
Equipment Manufacturer
Residential End Users
Retailers
Transfer of Ownership
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Q & A