The Department of Mineral Resources and Energy (DMRE) is finalising an internal audit on a bidding process to enable the finalisation of contractual arrangements with appointed service providers for the department’s National Solar Water Heater Programme.

Following the conclusion of the audit, the installation of solar water heaters (SWH) is set to resume.

The DMRE has not installed any SWHs in the 2019/20 financial year.

In a response to a Parliamentary question by the Democratic Alliance’s (DA’s) Kevin Mileham, who is the Shadow Minister of Mineral Resources and Energy, the DMRE confirmed that installation companies had been appointed in December 2019.

When asked about the number of units still in storage, the department said it had procured 87 206 SWH baseline systems from bid number DOE 008/2015/16, from which 150 systems were installed in the Sol Plaatjie municipality on a repair and replace programme during the 2018/19 financial year.

Another 200 systems were installed during the same period at a pilot project in Nelson Mandela Bay municipality, with the remaining systems in storage – some at State-owned entities, municipalities and suppliers/manufacturers’ storage facilities.

The monthly storage fees, however, vary depending on the number of days in a month, the DMRE indicated. As an example, for a 30-day month, the storage costs amount to just over R7.9-million, while in a 31-day month, storage costs are just under R8.2-million.

In terms of the supply agreement for the supply of the SWHs, the department said it had “both financial and contractual obligations” to settle additional storage costs in line with the extension of time on taking delivery of the manufactured goods.

However, the DMRE noted that a delay was experienced owing to participating municipalities’ delay in concluding framework agreements in accordance with the Intergovernmental Framework Act owing to the project being implemented across the different spheres of government and the need to clearly outline roles, responsibilities and obligations of each of these spheres during the programme’s implementation.

Following the delay, the DMRE partnered with the Department of Labour and Employment (DoL) and the Central Energy Fund to facilitate the training of installer assistants.

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South African startup company Plentify has won the South African edition of the EDF Pulse Africa innovation competition.
The competition is aimed at supporting African innovators committed to the continent’s energy development.

Plentify turns water heaters into grid-connected thermal batteries, which intelligently “recharge” when electricity is abundant on the grid, thereby improving reliability, decreasing reliance on expensive generation and saving water heating costs.

The company achieves this using an easy-to-install Internet of Things controller, a mobile application and a cloud-based artificial intelligence engine, which turns each water heater on or off, based on the needs of the user and the grid.

As winner, Plentify will participate in the grand finale of EDF Pulse Africa, which will be held in Paris, France, in November.

EDF Pulse Africa was created in 2017 by integrated electricity company EDF to discover the African continent’s technological gems and support innovation by involving local entrepreneurs in the development of innovative offers.

The EDF Pulse Africa tour spanned seven countries on the continent, discovering candidates that were plugged into their local economies.

The winner of each national edition is awarded a place in the finale.

Seven startups were selected to compete in the South African final, presenting energy solutions in off-grid power generation, electrical power applications and services, and access to water through the use of electricity.

The competition was open to startups and small and medium-sized enterprises with fewer than 50 employees in the 54 African countries.

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The DA-run City of Cape Town has threatened to disconnect solar panels, and will slap residents with a R6,425.90 fine if they fail to register their rooftop solar photovoltaic (PV) installations.

This applies to both grid-tied and off-grid solar PV systems but does not apply to solar water heaters.

Mayoral committee member for informal settlements, water and waste services, and energy, Xanthea Limberg said unauthorised PV systems can interfere with the quality of electricity supply, electricity demand management and future network planning.

She said residents have a “grace period” until February 28, 2019, to register their solar PV connections.

Also read: Under new draft rules every solar panel on every house – and backup generators too – will have to be registered with the government
“The City embraces the uptake of alternative energy as this contributes to creating a cleaner and greener city,” Limberg said in a statement.
“We are, however, required to ensure that electricity supply systems comply with relevant standards and do not pose a safety risk.”

She explained that the fine will be used to pay for the removal of unauthorised solar connections.

The City of Cape Town, Limberg said, is legally required to ensure that the electricity distributed to all its customers complies with set quality standards.

“We would like to thank our customers for their cooperation during the registration process.”

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When Pracash Arendse got a job at the Isolar factory in Atlantis he was excited that he would be able to provide for his family. Jobs are hard to get in this suburb north of Cape Town, and many households live in poverty.
Arendse, who lives in Atlantis’s Protea Park, is now facing a daunting task of providing for his wife and three children because he and his fellow employees last received wages in February.

Isolar manufactures solar geysers. Because of a lack of orders from the Department of Energy, the company has been on the verge of closure with 85 jobs at risk. GroundUp has reported how the company has been let down by government. The company started in the first place because of a government subsidised programme to buy solar geysers. But the programme has crashed due to a budget cut from R384 million to R0.

With no funds in sight to pay its employees, the company advised its 85 employees to claim benefits from the Unemployment Insurance Fund (UIF).

But the employees have not been through a retrenchment process, and according to labour lawyer Michael Bagraim this is illegal. “They haven’t been dismissed yet. They should have been retrenched first to get UIF and severance payment,” said Bagraim.

He advised the factory’s employees to go to the Department of Labour to lodge a complaint about non-payment of wages and thereafter to go to the Commission for Conciliation‚ Mediation and Arbitration (CCMA) to launch an application for unfair labour practices.

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The SA Bureau of Standards (SABS) has been strongly criticised by business, which says the entity is losing the country at least R4 billion a year in exports in the manufacturing and engineering sectors alone.

This comes after years of businesses complaining about a lack of testing by the SABS, resulting in manufacturers losing contracts because they are unable to obtain the SABS mark timeously, or they have been unable to renew 2 600 permits to use the mark.

Trade and Industry Minister Rob Davies is assessing representations from the SABS board on why he should not go ahead with his intention to put the entity under administration for not performing to its mandate. The SABS falls under Davies’ department.

Steel and Engineering Industries Federation of Southern Africa economist Marique Kruger said the lack of testing and certification by the SABS within the required time frames was a concern, as certification was often needed for products to be sold locally and internationally.

Kruger said trade deals being delayed or cancelled due to a lack of testing hit smaller businesses the hardest and caused a loss of billions in exports a year in the manufacturing and engineering sectors.

“The impact on the domestic production value chain is also huge,” she said.

Director at GAP Holdings, Theuns van Aardt, said manufacturers in the solar water heating industry were “tearing their hair out” because they “cannot get a system approved by the SABS”.

He said the piping, pump and valve industries were similarly affected, and were “being put at massive risk”.

Business development manager Carolien van der Horst of the SA Capital Equipment Export Council said the SABS was also failing to audit the local content of products supplied in government contracts as stipulated in government’s Industrial Policy Action Plan.

Van der Horst said this resulted in companies possibly supplying imported products when servicing tenders from state entities. However, she said it seemed that no one wanted to pay for the SABS to conduct these audits.

SABS CEO Boni Mehlomakulu hit back at industry and the department of trade and industry this week, saying she was fulfilling her mandate according to policy that was implemented in 2005.

She said the issues affecting industry were inherent in the policy, which emerged from the 2004 National Economic Development and Labour Council (Nedlac) report, titled Modernising the South African Technical Infrastructure.

Informed by a department of trade and industry position paper in part authored by Lionel October, who was then the department’s deputy director-general, Nedlac agreed that the SABS should split into a commercial testing and certification entity, and its statutory standards setting body should be funded by government.

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CAPE TOWN — Seven manufacturing companies in South Africa face possible closure due the Department of Energy’s abrupt announcement of a R0 budget for the National Solar Water Heater (NSWH) programme before the parliamentary portfolio committee last month. Last year’s NSWH budget was R394m.

In at least one factory – Isolar in Atlantis – 85 employees have not received their salaries since February.

The NSWH programme started in 2010 as a rebate scheme under Eskom to replace existing electrified geysers with solar water heaters in order to alleviate the demand for power from the national grid. The initial target was one million solar water heaters by 2014. Only 400 000 units were installed under the rebate programme and in 2015 the Department of Energy took it over and changed the focus to providing solar water heaters to state-subsidised and unelectrified homes, setting a new cumulative target of 1.75 million units by 2019, and five million by 2030.

The existence of Isolar and other manufacturers was nurtured by the state programme, which also stipulated 70% of the components must be locally sourced.

Although questions sent to the DOE over a week ago remain unanswered despite numerous follow-ups by City Press, unofficial sources City Press spoke to at the Africa Utility Week conference in Cape Town this week believe the NSWH budget was reclaimed by Treasury due to lack of expenditure and failure of the programme. To date only about 87 000 of the proposed 1.25 million units have been manufactured, and the related installation phase of the NSWH programme has not been implemented at all. The 87 000 units remain stored in warehouses around the country.

At the energy budget vote speech on Wednesday, DA shadow minister for energy, Tandeka Gqada, said she believed part of the reason for the programme’s failure was it having been moved around. First from Eskom to the DOE, then late last year to the Central Energy Fund supported by the Independent Power Producer (IPP) Office.

Gqada said this was problematic as the Central Energy Fund “has its own challenges” and their managing the installation phase was not practical. Furthermore, the need for agreements with municipalities responsible for implementation was “too much of a risk”.

She said communication with the manufacturers affected by the removal of the budget was almost non-existent and it had “serious implications for our economy and our people”.

She said she had been in contact with three of the seven affected manufacturers who had won the bids to manufacture the solar water heaters. They had designed their scope of work in line with the original documents they had signed with the DOE and had invested a lot of money to deliver their orders. “With lack of clarity and communication from the department, these companies would likely close down,” said Gqada.

Isolar general manager Andre Fourie said the orders from the DOE increased as the factory capacity increased, allowing iSOLAR to grow from 15 staff in 2016, to 85 currently.

“The whole idea was, in theory, beautiful,” said Fourie.

But he said things started imploding in November last year, when they delivered their last purchase order, and no further order was forthcoming.

He said later in December the company received a letter from the DOE asking what its capacity for repair and replacement of solar water heaters was.

He believed the department were instituting the repair and replacement programme while they were “sorting out the political shenanigans”. (Former President Jacob Zuma had been outsed as president of the ANC in December, replaced by Cyril Ramaphosa, indicating a shift in power and the possibility of a looming cabinet reshuffle).

He said the repair and replace programme was also included in their tender award, so no new procurement was necessary. Briefing notes were sent, and the repair and replace programme was due to begin on 6 February. This was then moved to 22 or 23 February, then to 15 March. Then all communication stopped. “There was nothing.”

In early April they were informed the original tender cutoff date, which was 31 March, had been missed, which meant further requests for proposals related to supply, or repair and replacement, was cancelled.

Administrative staff manning the phones at the Isolar on a voluntary basis and hoping for any positive news from the DOE, said without salaries, some of their colleagues were facing eviction from houses or rooms they rented as they were not able to pay their rents. Others had used their job to extricate themselves from the drug and gang culture suffusing poverty-stricken Atlantis and were now having to sit at home all day and were being dragged back into the underworld.

Factory supervisor Jason Valentine (37) who still arrives at the Isolar factory every day despite having nothing to do, said he lived with his girlfriend in her parents’ house. As she also worked at Isolar, neither of them was receiving an income and they were all being forced to live off her parents’ pensions.

“Things are getting difficult at the house. “Mens voel nie lekker nie (a person doesn’t feel good), you eat food that you can’t pay for.”

Valentine said he also couldn’t get a loan to see them through because he didn’t know when, or if, they would get paid. Furthermore, he was expecting his first child to be born in six months.

Isolar administrators Shirmel Azure and Octavia Kotzee said the DOE still owed the company R40m for the last order completed in November. And even if new orders were placed, relationships with suppliers to whom the company owed money, would have to built up again from scratch.

Responding to questions on the NSWH at this week’s budget vote, deputy energy minister Thembisile Majola said the department was “very worried” about the seven companies but were “engaging with them”.

“We haven’t just let it go,” said Majola, “because every job loss is a concern to us.

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The procurement processes for the installation of solar energy systems under the Department of Energy’s (DoE’s) Solar Water Heating programme has not yet started, with no systems installed during the 2015/16 and 2016/17 financial years.
In response to a Parliamentary question, Energy Minister Mmamoloko Kubayi explained that the delay in the installation process was owing to the need to finalise the necessary controls and systems to mitigate the the problems experienced in the previous roll-out model.
Along with a global positioning system verification and tracking system, these included local buy-in from municipalities through the signing of the municipal framework agreement and the identification of the designated installation areas (DIAs) within the municipality, as well as the identification and accredited training of installers in each DIA.
Further mitigation comprised the social facilitation to ensure that the beneficiary community has been exposed to the operational requirements of solar water heater systems, and to align community expectations through the social facilitation platform.
The DoE also confirmed the purchase of 59 396 units as at April 3, 2017, which are currently being stored. 

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South African rocket scientist Andre Nel has been shortlisted as a finalist in the UK’s Royal Academy of Engineering Africa Prize for Engineering Innovation.
Nel invented a hybrid, solar microgrid solution, the GreenTower Microgrid, which uses 90% less energy to heat water.
​Only one-third of Africans have access to grid-connected electricity and heating water accounts for the majority of electricity costs in homes and offices.
A single unit of the GreenTower Microgrid packaged in insulated recycled shipping containers can service 15 homes, and reduce a community's electricity demand by 65%, considerably easing the pressure on the national power grid.

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Association of Municipal Electricity Users (AMEU) strategic advisor Peter Fowles recently issued a warning to municipalities against signing Letters of Intent or similar documents with private companies offering solar water heater (SWH) installations at no cost. He said these offers are made in anticipation of Department of Energy (DoE) funding, but that there is no application process in place at present.
Fowles warned that the 2008 DoE mandate to Eskom to install 1-million SWH systems under a conditional grant had been terminated and that the DoE had instead assumed responsibility for implementing the National Solar Water Heater Programme (NSWHP).
Subsequent to terminating the mandate, the DoE reported at the National NSWHP Workshop for municipalities on 4 September 2015 that roughly 400 000 of the1-million mandated SWHs had been installed in residential areas since 2004.
It said these installations had failed to lower demand as they had been focused on areas of low consumption. The installations were also found to contain predominantly imported components and the installation work was sub-standard. This the department ascribed to a lack of training.
The DoE also said verification of the number and locations of the SWH installations is unreliable as no monitoring had been done. Similarly, maintenance work on installed heaters had been neglected, causing households without electric water heating systems to heat water with kettles, hot plates or wood fires.

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