A R40 million manufacturing facility for solarwater heaters was launched in East London today.
The facility for Matla Solar Water Heating(SWH) is the first renewable energy sectorinvestor to locate in the East London Industrial Development Zone (ELIDZ) and is a major milestone for the Eastern Cape Province vision to positioned itself as a prime location forrenewable energy sector investment.
The project is funded partly by Matla Thermal Holdings, Taiwanese investment consortium led by Funland Industrial Co., and the Eastern Cape Development Corporation (ECDC).
The ECDC holds 15% equity in the firm, Matla Thermal Holding holds 53% and Funland Industrial Co. 32%.
The Funland Industrial Co. led consortium includes Funland Industrial Co., Tz-Jeng Energy Technology, and Ming Yang Solar Energy. They represent the Number one high pressure solar water heating manufacturer in Taiwan with over 25 years of experience in the manufacturing, design, andinstallation of solar water heaters.
The company will manufacture solar water heaters for the South African market as part of a response to government’s call for alternative energy solutions to reduce electricity consumption in the country.
Matla SWH will be the first fully integrated mass production manufacturing plant for both domestic and industrial Solar Water Heaters in South Africa. The technology partner from Taiwan will implement best practice for the sector and to grow the country’s capacity and cost effeciency to produce such products.
“Our market research noted that there are a number of small scale manufacturers in South Africa. With the technology and expertise we have based on our current partnerships, we will be able to produce on a large scale locally which will lower the costs for customers,” says Matla SWH General Manager, Andy Bin-Chi Lu.
He added that key to the company’s vision was to contribute towards industry diversification in the Eastern Cape while ensuring the importation of new technology and capability for the industry.
Lu indicated that the company will be focused on the supplying of industrial and commercial systems to the medium to high density residence and bulk usage market in the first year, while also expanding into the domestic solar water heater market with the registration of the different domestic systems on the Eskom DSM rebate programme. “The main target market for us initially is industrial users such as mining sector change rooms, student residences, apartment buildings and hospitals,” he says.
The facility is set to employ between 80 to 110 people within the next year with a production forecast of 30 000 units per annum by September 2011.
“Thirty thousand solar water heater units installed a year can translate to a maximum reduction of 75 megawatts of Peak Electricity Demand Reduction.” says Lu, “the solar water heater users would also stand to save electricity while playing a part in protecting the environment which would be in line with most of their corporate or organization responsibility policies,” says Lu.
“We’ll also be the first company to provide a lease option on the industrial/commercial systems in South Africa, catering for our clients’ different cash flow requirements.”
The industrial/commercial solar water heater market is estimated by Matla SWH to be around R4 billion, representing a maximum of 1000MW of peak electrical demand to be reduced.
This is considerably cheaper than achieving the same effect with domestic solar water heating systems, which would cost around R 5.5 billion to reduce the same 1000MW of peak electrical demand, and the Eskom DSM rebate program will be subsidizing up to R1 billion of that cost. The industrial/commercialsolar water heating systems will make investment sense without any government rebate or subsidies, and will therefore be easier to rollout when compared to the domestic market.
“Our Taiwanese investors, Funland, Tz-Jeng, and MingYang, have been manufacturing and installing industrial solar water heating systems since 1991. The first industrial solar water heating system that they have completed in 1991 for the National ChenGong University of Taiwan is still operational today, providing electrical saving for over 19 years. The saving will normally provide a investment return of 5 years to 7 years, and with 15 years of average system life, the client will be able to earn at least double the initial investment in the 15 years of the system’s useful life,” Says Lu.
Eskom General Manager for Business strategy and integration Andrew Etzinger commended Matla SWH for heeding the government’s call for South Africa to move towards greener energy sources.
“IRP 2010 indicates an energy reduction of 7000GWh and 12 000GWh respectively from efficiency projects and energy-efficiency technologies respectively from 2011 onwards,” says Etzinger.
“Eskom commends MATLA SOLAR WATER for taking notice of the call for a greener South Africa and a reduction in energy, and furthermore their challenge to their international partners to establish the solarmanufacturing plant in South Africa, which will not only reduce the pressure on the grid electricity, but also create a greener economy and reduce unemployment.”
East London IDZ Business Development Executive Manager Tembela Zweni says the attraction of Matla SWH in the zone is pivotal for the company’s (ELIDZ) renewable sector strategy.
“We are striving to operate a world class industrial park without costing the earth; and the launch of Matla Solar is a giant step towards achieving the goal of operating a green IDZ,” says Zweni.
Border Kei Chamber of Business (BKCOB) executive director Les Holbrook applauded Matla SWH’s establishment as a positive step in supplementing South Africa’s strained energy sources.
Eskom, says Holbrook, has acknowledged that they cannot match the energy needs of the country going into 2011.
“The most positive and likely benefit will be in the cost aspect. We are hoping that Matla will producesolar water heaters at an affordable andfriendlier price. The growth of our economy will be dependent on an efficient manufacturing sector – which unfortunately will not be able to attain the growth prediction if constantly being subjected to restrictions and load shedding.
“Water heating is one of the items that consume the most electricity. If we can increase the number of households that use solar heating by making systems more affordable, the country could easily reach its 10% savings target,” says Holbrook.