INTERVIEW: Johan Cilliers, First Solar
First Solar’s South Africa boss explains why the country is an exciting market for the PV industry
With ongoing discussions about future coal and nuclear plants, how committed is the South African government to renewable energy? The simple fact is that South Africa needs to get more power onto the system very quickly, and solar and wind are in the best position to do that. You need six or eight months to get a new [PV] plant on the system, whereas with a coal-fired power plant you’re looking at eight years or so. From that point of view, the government really has no choice but to look at renewables.
First Solar did not submit any bids in South Africa’s first three PV bidding rounds, which saw 1.5GW of capacity allocated. Do you intend to build projects of your own here? We’ve only been here for a short time — we’ve been busy developing in other markets. But I think by next year we’ll be ready to participate in the bidding process in South Africa. [The submission deadline for the fourth bidding round is scheduled to close in August 2014, with winners announced two months later.]
On the EPC side, what advantages does First Solar have coming into South Africa? Many of the domestic players who won projects in the early rounds don’t fully understand the PV [project cycle]. They start developing a project but maybe they don’t fully take into account the O&M phase. Sometimes they spend too much or too little money upfront. First Solar plays across the full PV value chain, from project development through financial close, into EPC, and then we do O&M and even the recycling process at the end. So we can share our experience to help developers make sure their projects are really well developed. That’s the added value we can bring to the table here.
And on the development side, how does the competitive landscape look? I think Round 3 [of South African tenders, whose winners were announced in October] represents the turning point between the amateurs and the serious players. After Round 3, you’re going to see a lot of smaller developers fall away. Last year, we saw more than 1,000 companies across the PV value chain go bankrupt. As South Africa’s banks and financial institutions really start to understand renewable technologies, we’re seeing them focus much more on bankable companies.
PV developers had to source 45% of their content locally during Round 3, and that level is going to continue pressing upward. Is this dangerous for South Africa’s nascent PV sector? The government’s focus is not so much on factories as it is on job creation. They’re just thinking that if you attract the manufacturing, that will provide a lot of jobs. People don’t always seem to understand that the local content is already increasing in a lot of ways. There are companies assembling [crystalline-silicon] modules. There are local companies getting into things like racking systems and trackers.
And do the local-content rules present a challenge for foreign module suppliers like First Solar? At the current threshold, we’re okay. We don’t know what’s going to happen in the future, and we’ll have to adjust according to what the policy is. But we’re not in the business of doing a few projects here and then it’s done. There’s a new industry that’s being created in South Africa, and for that industry to continue we’re going to need suppliers locally.
South Africa seems to be your main focus just now, but your job title suggests that First Solar sees a potentially much broader market for PV across Africa. Where else are you looking? There are a number of countries that have announced feed-in tariffs [FITs], such as Ghana [where the FIT came into force in September]. Countries can go for an FIT or for a bidding process, but the easiest way to get projects implemented quickly, if you’re not too sophisticated, is to simply announce an FIT. We’re monitoring the situation in each country closely. If you look at what’s happening across sub-Saharan Africa, everybody’s starting to wake up to renewable energy.
Johan Cilliers is regional director for sub-Saharan Africa at thin-film PV manufacturer First Solar
Cilliers joined First Solar last December, two months after the US solar giant opened its office in Cape Town
He was previously vice-president for sales and marketing in South Africa for Indian wind turbine maker Suzlon