The Solar PV Industry Association of South Africa (SAPVIA) recently hosted a media briefing looking at the issue of localisation in the solar photovoltaic (PV) sector in South Africa.
The country’s renewable energy industry, and the solar PV sector in particular, have expanded rapidly, with installed capacity now estimated at 10 GW and a pipeline of more than 50 GW planned for development in the next 15 years. This growth has been key in helping South Africa navigate its severe energy crisis and stabilise the electricity supply system. But beyond stabilising supply, the renewable energy industry and localisation of manufacturing within the sector present a major opportunity to drive jobs, industrial growth, and economic resilience.
Introducing the briefing, Dr Rethabile Melamu, CEO of SAPVIA, said the association had commissioned two comprehensive studies to map opportunities along the solar PV value chain. Drawing on insights from the two studies, the briefing highlighted the current state of the industry and potential pathways for enhancing local manufacturing capabilities.
“Based on the evidence gathered, we support localisation in areas where South Africa already has capacity and capability, and where investment can deliver meaningful impact,” Melamu said.
She noted that: “Recent public debate has highlighted some misconceptions about localisation. We want to clarify that assembling solar PV modules is not the same as manufacturing them. And understanding this distinction is critical to setting realistic expectations.
“Localisation should also be seen more broadly than the assembly of PV modules alone – encompassing the manufacture of other components, as well as installation and services that can strengthen the sector and create employment. There is significant potential for the localisation of trackers, mounting structures, cables and MV switchgear, for instance, and indeed this has been happening already,” Melamu said.
She further noted that most jobs in the solar PV space are created in the installation and maintenance of solar PV systems.
It is clear that building a robust value chain will require targeted support, including policy certainty and investment incentives. SAPVIA is already working with government and other industry stakeholders in the implementation of SAREM (the South African Renewable Energy Masterplan), to ensure localisation delivers sustainable economic benefits alongside energy security.
Dr Melamu provided a detailed overview of the solar PV value chain, which is considered in two main subcategories: manufacturing and assembly, and deployment.
The manufacturing subcategory includes the production of essential components such as ingots, silicon cells, and glass, and the assembly process involves bringing these components together to create PV modules. The deployment phase focuses on project development, including permitting, financing, construction, and grid connection.
“Although South African companies have the potential for local manufacturing, they engage predominantly in assembly, importing most components from countries like China. This situation contrasts with the manufacturing capabilities for balance of plant components such as mounting and tracker systems, where local production is more prevalent. While South Africa can assemble PV modules, core manufacturing that involves the entire value chain remains limited,” she said.
The briefing also shed light on the global landscape of solar PV manufacturing. China currently dominates the sector, accounting for the major share of global production, with a few other countries, like India, emerging as competitors. The studies commissioned by SAPVIA highlight the need for South Africa to adopt a similar long-term investment strategy to build a robust local manufacturing industry.
De Villiers Botha, Deputy Chair of SAPVIA, shared insights into the historical context of localisation efforts in South Africa's solar industry. He recounted the challenges faced during the early REIPPPP rounds, noting that many factories established to support local manufacturing were forced to close due to inconsistent policy support and a lack of sustained demand. Botha also emphasised the importance of creating jobs and highlighted the stark difference in employment numbers in assembly compared to large-scale solar farm projects.
The SAPVIA briefing provided valuable insights into the potential for localisation of the solar PV sector in South Africa, highlighting particularly:
- the need for a strategic focus on local manufacturing capabilities
- the importance of a stable policy environment to support industry growth
- and the potential for job creation through investment in the solar PV value chain.
“As the industry evolves, stakeholders must work collaboratively to overcome challenges and harness opportunities for sustainable development,” Melamu said.
Notes:
The first study: The localisation potential of the South African Photovoltaic (PV) Industry and recommendations to support local manufacturing in South Africa, was published by SAPVIA in October 2022.
A further study: State of South African manufacturing, its potential and resources required for further development of PV value chains, was undertaken by SAPVIA working in partnership with: Energy Partnership/Energyiepartnerschaft South Africa - Deutschland, the Department of Mineral Resources & Energy, SolarPower Europe, and GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit).
For more information visit www.sapvia.co.za
