Developing SA's solar water heater industry : identifying key success factors for future growth

Hardie, Mignon (2011-03)

Thesis (MBA)--University of Stellenbosch, 2011.


The government has stated its intentions to increase the usage of solar water heating (SWH) through its National Solar Water Heater Programme (NSWHP). As described in the report, increased adoption of SWH would have a number of benefits for South Africa. Firstly, replacement of electric geysers by SWHs would contribute to the meeting of energy efficiency targets through the reduction of energy consumption. Secondly, the widespread adoption of SWHs would help SA to meet its renewable energy targets. Thirdly, it would result in growth in the SWH industry, including the manufacturing, installation and related sectors, thereby contributing to an increase in 'green' jobs. It would have the socio-economic benefit of energy security for South Africans. The research report looks at the factors influencing the SWH industry's future growth from the point of view of the suppliers. It considers the interplay between consumers (market demand), government (public policy measures) and suppliers (businesses providing services related to SWH) to determine how government can support industry, how suppliers can grow their business and industry and how government and industry can work together to create the conditions for sustained market demand. As is discussed in the literature review, there are certain barriers to the adoption of SWH technology. As such, government intervention is needed to help overcome these barriers. The literature review recounts the available policy tools and considers how these have been applied in other countries to stimulate demand for SWHs and to support the local industry. The research report takes the form of a survey of SWH suppliers with the following aims: - To describe the industry in terms of its age, maturity and ability to scale up; - To determine the major barriers to the industry's growth; - To specify the appropriate public policy tools to overcome these obstacles to growth; - To establish how confident the industry is in the NSWHP and government efforts to promote the industry; - To provide a list of key success factors that are required for the industry's long-term, sustainable development. The report concludes that there are three criteria that would help the industry to become sustainable: market demand certainty, investment confidence and positive competition. Certainty of future market demand would build confidence in the industry for investors. In turn, increased investment would benefit the forces of positive competition.

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