Due to the persistent challenge of load-shedding in recent years, South Africa’s solar PV industry has experienced remarkable expansion. By 2023, the country boasted 5,200MW of installed private solar capacity, doubling the previous year’s figure, as reported by analysts. This surge has been so significant that it’s believed to have contributed to a reduction in load-shedding levels by Eskom in 2024. However, amidst this growth, the sector has become increasingly competitive.
This competitiveness extends to both local companies engaged in selling, installing, and servicing solar PV installations, as well as to importers of solar components. Importantly, South Africa’s solar industry heavily relies on imports, with approximately 80% of components sourced from abroad. Given the considerable time it would take to develop internal solar manufacturing capabilities, the value of solar panels imported, amounting to R17.5 billion in 2023, is expected to continue increasing in the foreseeable future.
Within this landscape, solar importers must seek competitive advantages wherever possible. Harry Scherzer, CEO of Future Forex, suggests that one area where solar importers could potentially gain an edge is in optimizing their international money transfer processes.
“Most solar importers are rightfully focused on bringing the best quality product at the best possible price point into the country,” he says. “It’s understandable that they might not have considered how a different approach to international money transfers can positively impact their business.”
“Chances are, most importers simply use the same bank as they do for all their other business transactions,” he adds. “While that may seem logical to anyone who isn’t overly familiar with the banking sector, this approach can be costly both from a monetary and efficiency perspective.”
Scherzer highlights the financial burdens stemming from a lack of transparency within South African banks, particularly evident in international money transfers. This opacity often results in organizations paying exorbitant fees, diverting funds that could otherwise be reinvested into the business, bolstering stock, or augmenting salaries for solar importers.
Moreover, using banks for international money transfers introduces efficiency challenges. Scherzer notes that the extensive histories and sheer size of South Africa’s major banks lead to antiquated processes and operational methods. Traditional banks often necessitate cumbersome procedures, from becoming an international payment customer to executing transactions, involving copious paperwork and lengthy interactions with customer service representatives. Such inefficiencies pose significant obstacles for businesses operating in dynamic sectors like solar, where agility is paramount.
“I would advise any solar importer to work with an independent international money transfer provider that prices transparently, has a strong focus on automation, and offers exceptional customer service,” says Scherzer. “In other words, the provider shouldn’t just make international payments easy, it should also offer expert-level customer service in the form of a dedicated Account Manager, who understands the intricacies of the business and who will assist with any snags that it might encounter.”
“The South African solar sector is only likely to become more competitive in the coming years,” he concludes. “That means that players in the space will have to use any advantage they can. Switching international money transfer providers is one of the simplest and most effective ways to do so.”