1. Solar Water Heating Component Export to South Africa Adriana Haub Allie Cass Maira Da Silva Alejandra Arias Esther Lee Zuri Giang Group # 2:

2. Meet South Africa Official Name: The Republic of South Africa Location: Southern tip of Africa; 2,798 kil. between South Atlantic and Indian Oceans Capitals: Pretoria (executive), Bloemfontein (judicial), Cape Town (legislative) Largest City: Johannesburg Population: 51.19 million (2012 World Bank) Official Languages: Afrikaans, English Government: Parliamentary Republic - President Jacob Zuma (both Head of State and Government) GDP: 384.3 billion USD (2012 World Bank) Growth Rate: 2.5% (2012 est.)

3. The SWH System Market Government Incentive and Regulations Imports are Cost-efficient and Higher Quality Opportunity: Higher quality at a lower cost Customized After-sale Support Assembled locally Economy Incentive and Job creation Issues with current imports: Systems are big to ship Difficult to install and maintain Unfit for local households No customised after-sale support

4. Component of the collector for the solar water heater system Absorbs sunlight and converts it to usable heat Top quality borosilicate glass Inner tubing has a solar absorbing coating: ensures an optimal and even thermal output under the worst weather condition Manufactured in the U.S. Life expectancy of more than 30 years Product: Solar Evacuated Tube

5. Price and Packaging Price ranging from $400 to $500 per set of 100 pipes - Negotiable South African Consumer Protection Act All descriptions, instructions, warnings, and labeling on the package will be in English Indicate details of the official South African service distributor and less about the importer

6. Product Service Offering Guaranteed No-cost Ten-year Warranty - product service, - technical support - training Limited Lifetime Manufacturer’s Warranty

7. Target Segment Commercial: SWH Manufacturing Companies in Northern Region of South Africa Limpopo, North West, and Mpumalanga Lowest number of installations Expected growth with government program assistance and growth of manufacturers

8. SWH Manufacturing Companies RegionsManufacturing Companies LimpopoSolar Vision, Solartech Limpopo North MpumalangaASG Solar Solution, Gener-8 Witbank, Solar Focus, Solar Tech North WestGener-8 Potch Cities: Johannesburg & GautengGeco Lighting, Genersys South Africa, GoSolar CC, Kwikot (Pty) LtdGenersys South AfricaGoSolar CCKwikot (Pty) Ltd Potential Customers: List of Solar Water Heater Manufacturers in Northern South Africa Sources: Energy Source Guides and ESKOM

9. South Africa’s Demand

10. Government Involvement Government implementing Programs such as Solar Water Heating Programme. These Programs implement and subsidize installation of Solar water systems throughout the country Expected installation on 1 million Units by 2015 5.6 millions by 2020 Source: Presentation of Raj Pandaram, Eskom, 7 March 2013

11. Local Importers The majority of Solar Water Heating Systems and its components are Imported Into South Africa Local Importers Include Solardome SA, Easy Solar PTY. Ltd, and Enerjetic Distributors

12. China: - Lower quality materials, cheaper product, not durable, usually 5 year warranty, tubes usually range 200-600 (US Dollars) Germany: - Limited exports, higher price, usually 5 year warranty, tube price from 1000( US Dollars) Major Export Competitors

13. Regulations on SWH Systems 2009 National Solar Water Heating Plan - 5.6 millions installations by 2020 2009 National SWH Rebate Programme - Supports implementation and development South African Bureau of Standards (SABS) - Inspect and certify installed system to be *Eskom Rebated 2011 Energy Usage in Buildings - 50% of hot-water demand MUST come from sustainable source *Eskom generates 95% of South Africa electricity and implements the Rebate Programme.

14. Regulations and Tariffs 2011 Preferential Procurement Policy Framework Act (PPPFA) 70% local minimum content threshold SWH components Importing Solar Evaporated Tube Tariffs 20% Duty rate/14% sales tax Export Declaration (SED) required May be subject to Letter of Authorization (LOA)

15. Distribution Channel ●Formal institutions require use of an intermediary ●Indirect method using a foreign based distributor ●Product and customer characteristics require little control and after sale service of the component ●Pros of using a foreign-based distributor: - Upfront/direct payment - Avoidance of issues concerning shipping, customs, and publicity - Knowledge of the local market and its demand

16. Distribution Channel Our Company South African Based Distributor Renewable Energy Equipment Manufacturer Residential End Users Retailers Transfer of Ownership

17. Q & A