/ 6 August 2007

SA solar star in Germany

As a country we do not do too well on the green front. We are generally energy inefficient and wasteful. But we can take a small measure of pride next month when the first solar panels resulting from South African taxpayer-funded research and development come out of a state-of-the-art manufacturing plant costing upwards of R500-million.

But South Africans will have to wait before they can use this technology. The panels about to come out of the production process next month are being produced and marketed in Germany.

It will be a good two years before the first thin-film solar panels, as they are called, are manufactured in South Africa.

The electricity-producing panels are leading edge in terms of both the cost, reckoned to be about a quarter of existing technology, and efficiency.

These panels convert considerably more — in excess of 16% — of the sun’s rays to electricity than current offerings. As one observer says, “in solar anything above 10% is considered pretty good”.

This solar technology, developed over a 13-year period at the Rand Afrikaans University (now the University of Johannesburg) with R13-million in funding from the department of science and technology’s innovation fund, stands to make a significant contribution to easing the country’s energy crisis.

Its low cost, says one South African-based energy analyst, means that it can be cost competitive with coal-fired electricity, offering the prospect that this solar power can help the country to embrace clean, renewable energy.

The German-based company, Johanna Solar Technology (JST), which secured the first licence to produce these panels, has three South African investors.

Richemont/Venfin, Anglo Coal and the state-owned Central Energy Fund (3%) own 24% of JST.

JST makes the solar panels under licence from PTIP, a South African company which is listed on the register of South African companies, Cipro, as a subsidiary of the University of Johannesburg.

The other shareholder is Professor Vivian Alberts, the chief inventor. The University of Johannesburg did not respond to a verbal and email request for a breakdown on this shareholding.

Maclean Sibanda, a senior patent attorney at the innovation fund, a business unit that reports to the department of science and technology, says the innovation fund will get 5% of any revenues earned by PTIP.

Sibanda says that the innovation fund’s agreement with PTIP means that the intellectual rights to the invention have to remain in South Africa.

The story of Alberts’s invention received a blast of publicity when the breakthrough was first announced a few years back, but for reasons that are unclear, there appears to be a reluctance by some of the parties to take the public into their confidence, so it has not been easy to get information. Some will only talk on an off-the-record basis.

Plans for a production facility in South Africa, which will match that set up in Germany, are at an advanced stage and are expected to be finalised within the next two months.

The facility will be the same size as the German plant, each year manufacturing panels that can produce 30MW of power. The plant represents an investment of between R500-million and R800-million.

The facility will be sited at the coast as the major part of the production is likely to be exported. An apparently high-tech production process, the facility will create a relatively modest 150 direct jobs, but many more downstream as South Africans switch to this clean energy source.

The Central Energy Fund will be the main South African investor, taking up between 33% and 49% of the shareholding. The other investors are expected to be one of the two private companies which are invested in JST, Richemont or Anglo Coal. The non-South African investors who are shareholders in JST are expected to hold about 40% of the South African manufacturing operation.

The South African plant is also to benefit from any know-how that the German operation has learned from setting up the new plant. JST could also assist, such as in skills training of the South African workers.

A site for the plant has been identified, one of the remaining requirements being that an environmental impact assessment (EIA) be completed before the manufacturing plant be built.

The German licence restricts the licensor to selling outside of Africa. The South African licensor will have no such restriction. It will target both the continent and the rest of the global market.

One source says that, when the technology was first marketed locally to investors, there was a marked lack of interest. “Investors were quite scared,” the source says, explaining that while the technology was proven in pilot studies it still had to be proven in a commercial manufacturing operation.

German investors in the meantime learned of the technology and applied for a licence, one of three PTIP is understood to be issuing.

The use of solar energy to heat hot water is relatively well known. The technology can also be relatively simple, being no more than passing water over a source that has been heated by the sun. Converting the sun’s rays into electrical power, a process known as solar photo voltaics, or solar PV, is a much more difficult and costly technology. Equipping an average household of five with solar PV can cost in the region of R100 000.

Thin-film solar uses a layer of metals less than the thickness of a human hair to convert the energy from the sun into electricity.

The technology developed by Alberts is not the only such solution. Fuel giant Shell is developing its own thin-film solar and Google founders, Larry Page and Segrey Brin have invested in another.

Called Nanosolar, this is a well-resourced competitor that raised more than $100-million in funding last year.

But Alberts’s solution is considered, at least by its supporters, to be the best of the best. It uses more metals, giving it more flexibility, and achieves the highest level of efficiency. It also reportedly offers significant cost advantages over rival technologies.

One supporter says the local plant should be aiming to produce four gigawatts of panels rather than 30MW. He says producing at scale will bring costs down.

A supplier of solar PV to the South African market grumbles that news of Alberts’s invention a few years back all but killed the domestic market as many people who were considering installing solar PV decided to wait until his solution was available, perhaps at as little as a quarter of the cost.

Common business sense says it will be offered more cheaply than rival products, but that it will be some time before the price falls closer to its actual costs.