Article: Collusion in solar industry, MPs told

[jes]

Not all is sunshine and light in the solar water heater industry, Parliament's economic development select committee heard on Tuesday.

You can view the page at http://mybroadband.co.za/vb/content.php/1997-Collusion-in-solar-industry-MPs-told

 

[LazyLion]

hahaha... epic! Screwed by Eskom, and screwed by the alternative energy installers!

A South African just can't catch a break! Welcome to the pig trough!

 

[The_Unbeliever]

oinkers oinking themselves...

...should be called fatten, farten, bursten and ooze instead...

 

[grok]

There is a "lot of collusion between the different players" on prices, economic development department deputy director-general for electricity, nuclear and clean energy, Ompie Aphane, told members.

"Soon after the rebate was increasd, as soon as Eskom announced that the rebate was going to be increased, so did the costs that the suppliers were charging.

He said when power utility Eskom increased its solar water rebate last year, suppliers and distributors of solar water heating systems increased their prices too.

Responding to questions later in the briefing, Aphane said he was not in a position to "categorically" state collusion was taking place.

Why isn't a proper investigation launched then? Oh wait, TIA.

 

[alchamy]

This was pretty obvious, Solar Geyser prices doubled overnight when load shedding and rebates came into the picture and the prices have been on a one way course ever since.

 

[ponder]

They should abolish fines for collosion/price fixing etc. Straight to jail for the pigs!

 

[smokey]

Well... the fact is that the solar industry saw a huge increase in demand and took advantage of it. If Eksdom wasn't so rubbish, they would actually have to compete.

 

[noxibox]

Well... the fact is that the solar industry saw a huge increase in demand and took advantage of it. If Eksdom wasn't so rubbish, they would actually have to compete.

So in effect you support milking customers. What these companies are doing is basically stealing.

 

[WilD_CaT]

So in effect you support milking customers. What these companies are doing is basically stealing.

No, but ignoring economics is stupid. You reduce prices artificially (Through rebates) and demand increases. This leads to real increases in price, so the suppliers are cashing in.

What do you think will happen is we socialise healthcare to make it "Free"? Demand increases and real costs rise.

Thats the way the world works. Kinda like gravity, you can't ignore it or make it go away by waving your hand and creating a law.

 

[shogun]

No, but ignoring economics is stupid. You reduce prices artificially (Through rebates) and demand increases. This leads to real increases in price, so the suppliers are cashing in.

If the suppliers cannot meet that increase in demand (and do not intend to, which seems illogical) then you are correct. If they can meet the demand, and the prices go up to match the cost consumers had to pay before the subsidy (effectively killing the increase in demand), then that tends to point to collusion.

An increase in demand should lead to an increase in supply as capital is invested to meet that demand. This will bring about further economies of scale, thereby reducing costs. More demand is never a bad thing unless the raw components are scarce (which they are not for Solar Geysers). The skill set to manufacture geysers is also not scarce.

In theory, by subsidising geysers and increasing demand, they should be triggering an increase in supply and an overall reduction in per unit costs over the mid term.

 

[noxibox]

No, but ignoring economics is stupid. You reduce prices artificially (Through rebates) and demand increases. This leads to real increases in price, so the suppliers are cashing in.

That presumes scarcity which will have to be demonstrated. Much more likely is that those involved are corrupt.

What do you think will happen is we socialise healthcare to make it "Free"? Demand increases and real costs rise.

So medical costs have gone up faster in Canada, the UK and Australia than they have in the US, and of those countries the US is currently the cheapest place to get medical care?

 

[Nanfeishen]

If the suppliers cannot meet that increase in demand (and do not intend to, which seems illogical) then you are correct. If they can meet the demand, and the prices go up to match the cost consumers had to pay before the subsidy (effectively killing the increase in demand), then that tends to point to collusion.

Well if you have the legislation makers, or Eskom working with suppliers in setting certain requirements, you also prevent cheaper suppliers from entering the market, stifle competition and keep prices high, that is collusion.

the fact that there was a restricted group of accredited suppliers dampened competition

http://www.businessday.co.za/articles/Content.aspx?id=132402

 

[Pieter @ 4 Seasons Solar]

Ja Ja , When something does not suit your pocket, there is price fixing..... Typical South Africans. They want first world solutions at third world prices.

The point is, It costs a lot of money to import the quality systems, then it costs a lot more to register that system with Eskom and get it tested by SABS, the systems need to be constantly checked to make sure they are sill up to standard.

This technology cost a lot to begin with, so stop being stingy and spend the R20 000-00 on a solar geyser instead of a flat screen TV. The first option actually saves you money....

 

[Gnome]

I'd rather keep paying Eskom than get Milked by some importer for R20 000. At that price it would take years to pay itself off.

 

[manesan]

Ja Ja , When something does not suit your pocket, there is price fixing..... Typical South Africans. They want first world solutions at third world prices.

The point is, It costs a lot of money to import the quality systems, then it costs a lot more to register that system with Eskom and get it tested by SABS, the systems need to be constantly checked to make sure they are sill up to standard.

This technology cost a lot to begin with, so stop being stingy and spend the R20 000-00 on a solar geyser instead of a flat screen TV. The first option actually saves you money....

Nice attitude, business must be booming.

 

[Nanfeishen]

Ja Ja , When something does not suit your pocket, there is price fixing..... Typical South Africans. They want first world solutions at third world prices.

The point is, It costs a lot of money to import the quality systems, then it costs a lot more to register that system with Eskom and get it tested by SABS, the systems need to be constantly checked to make sure they are sill up to standard.

This technology cost a lot to begin with, so stop being stingy and spend the R20 000-00 on a solar geyser instead of a flat screen TV. The first option actually saves you money....

Firstly why are you importing systems and not manufacturing here ?
Simple answer -- to keep the prices high

Having a look around and found a list of suppliers and manufacturers in Pakistan , after doing the exchange from Paki Rupee to Rand, the average unit cost between R1800 and R4500 for top of the range unit.
http://www.enercon.gov.pk/geysers.html

Or how about a stainless steel unit from China -US$ from 90 - 350 for a unit thats R655 - R2550
http://www.alibaba.com/product-gs/216149342/stainless_steel_solar_water_heater_solar.html

Heres a whole list of suppliers showing prices the average being about US$ 350
http://www.alibaba.com/showroom/solar-water-heater.html

Heres an article from 2009, showing the program the Queensland Government (Australia) aimed to put into motion :
http://www.solarthermalworld.org/node/753

The programme offers a standard installation to pensioners for no more than AUD 100 and to all other qualified households for AUD 500.

Pensioners getting a solar powered geyser for R800

The industry is conning people out of their money, not providing affordable products, and certainly not providing the products at anywhere near global market prices.
It therefore stands with reason that their is obviously something crooked going on in the local solar market.

 

[noxibox]

Ja Ja , When something does not suit your pocket, there is price fixing..... Typical South Africans. They want first world solutions at third world prices.

The point is, It costs a lot of money to import the quality systems, then it costs a lot more to register that system with Eskom and get it tested by SABS, the systems need to be constantly checked to make sure they are sill up to standard.

This technology cost a lot to begin with, so stop being stingy and spend the R20 000-00 on a solar geyser instead of a flat screen TV. The first option actually saves you money....

I'm sure you'll have no problem with us scrutinising your business to verify your claims. And actually no, what we want is first world solutions at first world prices.

My large TV saves me a lot more money than a solar heater could.

 

[ToxicBunny]

Ja Ja , When something does not suit your pocket, there is price fixing..... Typical South Africans. They want first world solutions at third world prices.

The point is, It costs a lot of money to import the quality systems, then it costs a lot more to register that system with Eskom and get it tested by SABS, the systems need to be constantly checked to make sure they are sill up to standard.

This technology cost a lot to begin with, so stop being stingy and spend the R20 000-00 on a solar geyser instead of a flat screen TV. The first option actually saves you money....

R20000 for a solar geyser? and saying it saves money?

Do you have any idea how long that would take to actually SAVE any money considering you've had to outlay R20k to get it installed.
You and your entire industry need to catch a wakeup, solar geysers are NOT meant to be that expensive, and aren't really anywhere else in the world.

 

[hsmnel]

Ja Ja , When something does not suit your pocket, there is price fixing..... Typical South Africans. They want first world solutions at third world prices.

The point is, It costs a lot of money to import the quality systems, then it costs a lot more to register that system with Eskom and get it tested by SABS, the systems need to be constantly checked to make sure they are sill up to standard.

This technology cost a lot to begin with, so stop being stingy and spend the R20 000-00 on a solar geyser instead of a flat screen TV. The first option actually saves you money....

Will definitely not use your company when I go solar.