When South Africa successfully incentivized businesses to manufacture solar panels, other African countries were watching. Solar panel manufactures have since popped up in Mozambique, Ghana, Nigeria and Kenya.
For locals, that means new jobs.
In an effort to reduce black-outs and meet growing electricity demand, the South African Department of Energy introduced the Renewable Energy Independent Power Producer Procurement Program (REIPPPP) in 2011. Its success kick-started significant growth in solar photovoltaic panel manufacturing plants in the country.
“It doesn’t surprise me. It’s not rocket science anymore to manufacture solar panels,” said Alexander Ochs, director of the Climate and Energy Program at Worldwatch Institute, in an AFKInsider interview. “We see this all over the world right now and that’s good. It’s green jobs, (and) if locally manufactured, it means less transportation. And obviously these countries can produce a lot cheaper than if you were to import them from Europe.”
Solar panel manufacturers globally will increase their spending for the first time in three years as they look to meet demand in emerging economies, according to an August 2013 report from IHS. IHS predicts spending in 2014 will rise by more than 30 percent to $3.8 billion, driven by the growing demand for photovoltaic power in the emerging markets of sub-Saharan Africa, South America, and the Middle East.
In fact, more renewable projects are expected in Africa with the announcement this month that the African Renewable Energy Fund, which invests in projects in sub-Saharan Africa, raised $100 million and expected to double that in 2014, according to the African Development Bank. Other contributors include the West African Development Bank, Ecowas Bank for Investment and Development, Dutch development fund FMO, Togo-based African Biofuel and Energy Co. and Mauritius-based Berkeley Energy.
All this activity means more business for sub-Saharan Africa’s solar panel factories.
So far in 2014, five new solar panel manufacturing plants have been announced or opened, adding to the nearly dozen that already exist in sub-Saharan Africa.
One of these sites opened in January, when China-based JA Solar and South Africa-based Powerway formed a joint venture to establish a solar panel plant in Port Elizabeth’s COEGA Industrial Development Zone. JA Solar makes solar panels while Powerway is a solar farm engineering company. Tian XU, sales director of JA Solar, told AFKInsider that the company is building up the factory for the third round of the South African Department of Energy’s renewable energy program.
“The JA module factory will start ramping up in July or August 2014,” XU told AFKInsider. The plan is to be at full capacity by the end of 2014 and employ about 200 workers.
South Africa remains the center of Africa’s solar panel manufacturing and is the base for a number of solar companies taking advantage of the government’s plan to deploy more than 1,400 megawatts of solar power by the end of 2014. The local content requirements for solar stipulated in the REIPPP have increased from 35 percent in the first and second REIPPP round, to 45 percent in the third round, behooving companies to locate there.
Established in 2007, Cape Town-based Setsolar makes and distributes solar panels and other solar components such as regulators, inverters, storage batteries and LED Lights. It also offers training and solar system design.
In April 2013, Durban became home to ARTSolar, a locally owned solar panel manufacturing plant considered the largest and most high-tech of its kind in Africa due to its automated Swiss and German equipment. ARTSolar was established by a group of South African entrepreneurs who wanted to take advantage of the growing interest in renewable energy. Today, their facility in the New Germany Industrial Park has the ability to manufacture about 250,000 solar modules annually.
April 2013 also saw China-based ReneSola and German-based Solairedirect Technologies form a “tolling agreement.” How it works is Solairedirect’s South Africa solar panel factory will assemble 120 megawatts of ReneSola-brand solar modules for three years. The South Africa-based subsidiary of French-owned Solairedirect, Solairedirect SA’s factory, established in 2009, is in the process of doubling its module assembly capacity and has about 90 employees. The deal with ReneSola includes Solairedirect also buying 20 megawatts of the ReneSola solar panels for use in their South African solar power projects, as well as another 34 megawatts of panels for projects outside South Africa. Under the second round of the South African government’s renewable energy procurement program, Solairedirect is building the nine-megawatt Aurora Solar Project and the 8.8-megawatt Vredendal Solar Project.
In February 2014, a spinoff company from the University of Johannesburg, Photovoltaic Technology Intellectual Property commissioned its thin-film solar module pilot project to Singulus Technologies.
Though thin-film solar panels are less efficient, they are very flexible and useful in a number of applications not suitable for traditional glass solar panels. Technology Intellectual Property’s facility in the Techno Park near Stellenbosch serves as a state-of-the-art research and development facility for perfecting commercial-scale thin-film modules for planned and future solar projects in South Africa, according to Singulus Technologies’ website. The commercial development of the TiP thin-film process has the backing of the South African government, and financial support from the Industrial Development Corp. and the Technology Innovation Agency of the Department of Science and Technology.
Rounding out South Africa’s solar panel manufacturers is China-based Jinko Solar, with a 120-megawatt solar panel production facility that should begin operations in May.
While South Africa’s aggressive renewable energy program has been a magnet for solar manufacturing companies, other countries are realizing the same interest due to energy expansion programs and changes in their government’s regulations.
In September 2011, Kenya claimed bragging rights for East Africa’s first solar panel factory, opened by Ubbinkasa joint venture between Dutch-based Ubbink B.V. and Kenya-based Largo Investments. The company, which markets itself around the slogan “Designed in Europe, Made in Kenya,” has grown to 80 employees.
“Demand has been higher than expected,” said Haijo Kuper, Ubbink’s managing director in an AFKInsider interview. According to its website, Ubbink expanded its product offerings in 2013 to include German-engineered Fosera solar streetlights. The company’s target? To “reach 5 million satisfied customers by the year 2018.”
But while Kenya is one of the six U.S. Power Africa countries, Kuper says the company is not working on any U.S.-funded projects.
Nigeria has a goal of getting 5 percent of its energy from renewables by 2020, particularly off-grid solar.
To this end, the country scored a solar panel manufacturing plant built by Germany-based JVG Thoma. Completed in February in Sokoto, the factory was partly financed by the World Bank, and produces solar panels designed to operate in extreme climates. A small solar power array was built next to the plant to assure a regular supply of power.
Meanwhile, Nigeria’s National Agency for Science and Engineering Infrastructure is shopping for about $96 million to double the output of its Karshi-Abuja solar panel manufacturing plant to 15 megawatts per year. The factory has been operating since September 2011 after the Nigerian government funded the purchase and installation of the manufacturing equipment, as well as providing basic infrastructure such as land and utilities.
Ghana is another country encouraging energy development by targeting 10-percent renewable energy by 2020, according to the Ministry of Energy. In February 2014, the Sustainable Equities Group, International Solar Utilities and PN Solar announced plans to build a 300 megawatt solar panel factory east of Accra, as well as develop more than 600 megawatts of solar power plant parks in Ghana. The plan includes exporting the solar modules to other African countries.
Developers have identified 800 acres of land in the Ahanta West District to build some of the proposed solar power plants. Construction is expected to begin in June. Once completed, the factory will create 350 jobs for local employees, according to Sustainable Equities Group.
“The construction of the solar parks is estimated at $750 million and would create about 2000 direct and 6000 indirect jobs,” Harris told AFKInsider. “Our current network of international employees will expand rapidly as we embark on an aggressive hiring plan in order to deliver on our contracts.”
When Mozambique’s first solar panel factory opened in November 2013, it was such a big deal that President Armando Guebuza spoke at the inauguration. Located at the Beluluane Industrial Park outside Maputo, the factory was financed through a $13-million loan from the Export-Import Bank of India. Owned by the National Energy Fund, the plan is to make cheap solar panels available for Nigeria’s massive rural electrification projects with a focus on village schools and health clinics.
Large foreign companies will choose one country over another to build their solar panel factories based on a particular government’s dedication to renewable energy, how stable the country is, and if there are any tax incentives or procurement programs.
And as more solar panel manufacturers set up shop, other specialty tech companies follow to produce the needed components that make solar power systems work – such as inverters, power controllers and storage batteries. When this tech synergy happens in clusters, there are local jobs created side-by-side with imported foreign professionals. In fact, some countries like South Africa insist on locals being hired when foreign companies locate in the area.
Creating these jobs in rural areas is not that difficult, according to Worldwatch Institute. Less high-skill, technical jobs could easily expand into more remote areas. Worldwatch Institute created the EmPowering Africa program to help leaders in sub-Saharan Africa “transition to a sustainable energy economy.”
“We have this fascinating case of the ‘solar women’ in Central America, which is a local initiative — just some women living in very remote areas of Nicaragua that started to assemble solar PV cells and put them on roofs, and they’re doing everything themselves,” Worldwatch’s Ochs told AFKInsider. “They have some basic material and they have support by international NGOs that gave them the basic materials that they need. But they’re assembling, and they’re putting the wires up on the roofs, and they’re electrifying houses that never had access to modern electricity.”
It’s feasible this same micro-production model could spread to African villages, Ochs said.
