Solardome closes production facility after 42 years

"Solardome, the oldest solar water heater (swh) manufacturer in the Western Cape, will be closing its production facility at the end of November 2011.
This family owned business, founded in 1969 by Gustaf Lindenberg and run by his son, Tertius, has been producing high quality durable swh systems for 42 years. Solardome has been a landmark in the swh industry, advancing research into innovative technology, product development and most importantly creating valuable jobs in this sector.
Tertius lays the blame for the closing of their production facility at the door of the regulatory environment in this country.
At least three more swh manufacturers in the Western Cape are at the point of making the same decision as Solardome.
Since the implementation of the Eskom swh incentive programme in 2008, the industry has been through incredible flux. This programme has brought with it new regulatory costs and often unclear policy or programme changes that caused knee jerk reactions to the market. Had the programme managed to stimulate the demand for swh’s this higher regulatory cost might have been absorbed. After three years of the programme, the installation of high pressure swh’s has grown from about 16,000 to about 30,000 units per year. Even though this is a reasonable percentage growth, we are working from such a low base that it cannot be considered significant. Furthermore, if compared to the more than 500 000 standard geysers installed every year in South Africa, it is clear that the market is still operating at well below its potential. What is even more significant is that the number of suppliers of swh’s has in the same time grown from 45 to more than 500. This programme has managed to convince new businesses (mostly importers) to enter the market, but has failed to stimulate the demand in the same way.
Prior to the implementation of the swh programme approximately 50% to 70% of swh’s installed in South Africa was locally manufactured. At the outset concern was raised by several local swh manufacturers about the future viability of the industry. As part of the terms of reference of the programme, there was a commitment to implement a local manufacturing component to the calculation of the subsidy value within one year from the launch of the programme. This local content multiplier was to be implemented no later than 2009. This local content multiplier was however only announced in June 2011, but was later cancelled. It was announced that a revised structure would be implemented in October 2011. In September 2011 the implementation of the multiplier was postponed to January 2012.
On the eve of our country hosting COP17 and with the supposed promotion of renewable energy, reduction of carbon emissions and especially local economic development, it is a tragedy that a swh manufacturing business that has been in operation for more than 40 years has to close its doors.
It is probably too late for Solardome, but something has to change so that we don’t look back in a year’s time and see that every last one of our factories have closed and the only swh’s on the market are imports."
SOURCE: K Kritzinger - Greencape