Industry collusion unlikely, says expert

27 January 2011

I read with interest reports in Business Day and Fin24 that Department Deputy Director-General for Electricity, Nuclear and Clean Energy, Ompie Aphane believes there is collusion between solar water heater suppliers.

In my opinion this is an absurd statement. Firstly, there are just too many players in the market. To get so many players to agree on the colour of the sky let alone which price to charge for solar water heaters is near impossible.

Prices in the solar water industry are largely determined by market forces. Cheap systems cost less, better ones cost more. There are many factors that influence the cost of solar water heaters: the exchange rate, commodity prices, fuel and transport costs.

It should also be noted that many solar water heater companies use equipment from one or two suppliers. So obviously, assuming they follow roughly the same business model and have roughly the same input cost, their prices will be almost the same.

More and more dealers are also increasing their prices as they adapt their business models to be more realistic. When the market increased with the influx of a great number of bakkie-brigade entrepreneurs, many failed to take the costs associated with installation and overheads into account.

It should also be noted that greater legislation requires – at last count – two vacuum breakers, a timer, a coc and a blending valve. This has also placed upward pressure on the price of solar water heaters.

Selected Energy has kept the price of the Solahart system very consistent over time. With 30 years of experience we know how to get the pricing right.

Regards,

Jim Hickey,

MD - Selected Energy

Distributed on behalf of Selected Energy:

Carina van Heerden

T: 011-888-9597

E: carina@medios.co.za

Solahart Contact Details:

0861 SOLAHART (7652 4278)