South Africa – part 2: German “late movers” must score with experience, innovation and a proven track record

Last week, Jens Hauser, Manager Sustainable Energy, Southern Africa – German Chamber of Commerce and Industry PNC, gave us an overview of the local PV market. Now, he is telling us more about chances and risks of Germany companies in the local market.

Solardirekt: „Do you see perspectives for German companies in the South-African PV market? What sectors are particularly important for German companies?”

Jens Hauser: „The South African PV market is characterised by a huge number of players. As a result, there is much competition. Companies which aim to enter the market now are regarded as “Late Movers”. These companies must offer specific products or services with a distinct USP to be successful. German companies from the renewable energy sector which have been active in South Africa for several years are well established and have their own presences. In general, the commercial market sector is most promising for the German companies with plants for self-supply (embedded generation) up to 1 MW.”

Solardirekt: „What are the assets of German companies in South Africa?“

Jens Hauser: „Still, German newcomers can be successful here as the market keeps growing. They need to have profound know-how and experience and a proven track record. Also, they have to offer innovative solutions, products and services. These can be energy services or operator models, such as „Build–operate–transfer“ (BOT), „Build–own–operate“ (BOO) oder „Build–lease–transfer“ (BLT). Also, sales models, such as the delivery of standardised complete systems with eligible system sizes, solutions for the optimization of self-supply and ballast management as well as customer-oriented utilization concepts for renewable electricity (sector linking) or the introduction of well-known brands (brand power) and successful project portfolios offer promising perspectives.”

Solardirekt: „Is „Made in Germany“ a quality seal in South Africa?“

Jens Hauser: „Definitely. Germany is an established trade partner of South Africa. German companies are leading suppliers of plant and machine technology. The Southern African companies appreciate their advance in know-how and thanks to its premium quality, German technology is valued high. Therefore, the preconditions are good to participate in a growing market.”

Solardirekt: „What is important to know when entering the market? What are typical do’s and don’t’s?

Jens Hauser: „The organisation of the economy resembles those of the anglophone countries. Yet, we recommend asking for professional help when entering the local market, for example for the registration of the firm or residence permits of the employees, in order to shorten the process. There are many agencies, service companies and registries practicing German and South African right who offer consultancy. Also, due to the existing competition, you must be patient when entering the market. Finally, you need a good network and an unquestionable track record in the renewable energy sector, as there are still many unqualified players active in the market.”

Solardirekt: „What kind of support offers the Chamber of Commerce?“

Jens Hauser: „We carry out the “Energy Solutions made in Germany” initiative of the Federal Ministry of Economy & Energy and support German companies with all instruments the initiative offers (http://www.germanenergysolutions.de/GES/Navigation/DE/Home/home.html). In addition to this, the Competence Centre Renewable Energies of the Chamber of Commerce is an information and consultancy platform for companies from this market sector. With the project group Renewable Energy and the German-South-African energy partnership we work on improvements of the market. Also, companies which are interested in entering the market can chose from several individual (with costs) services, such as the introduction of potential business partners.”

Solardirekt: „Besides photovoltaic, are there any other promising renewable energy sectors in the local market for German companies?

Jens Hauser: „Biogas is becoming more popular. I am positive, that it will become an important pillar of the energy supply mix in the coming years. The technology is ideal to fight the growing issue of waste treatment. The use of biogas to reduce organic waste in garbage dumps offers interesting and economically attractive projects for communities and companies. Also, the industries develop an increasing awareness for the generation of industrial process heat through solar heat.”