Germany’s biggest solar energy company SMA Solar Technology AG said it would set up a factory for production of solar inverters in South Africa in a bid to meet the local content requirements and benefit from the expected future growth of the South African market. SMA CEO Pierre-Pascal Urbon noted that South Africa has strategic importance for SMA, as energy demand is growing in the country. He added that in South Africa photovoltaics are a financially attractive alternative to other forms of power generation.

SMA said it had started already preparations for setting up the inverter production in South Africa, but did not disclose further details. The company currently has inverter production units in Germany and North America.

With sales of EUR 1.5bn in 2012, SMA is the world’s biggest supplier of solar inverters, a key component in photovoltaic plants that convert power from solar panels for use on the grid.

South Africa is experiencing severe energy constraints and renewable energy plants are one of the solutions to the problems. According to the Department of Energy’s Integrated Resource Plan, by 2030 14% of the country’s energy will come from coal, 22.6% from nuclear, 9.2% from open-cycle gas turbine, 5.6% from closed-cycle gas turbine, 6.1% from renewable energy carriers including hydro, 19.7% from wind, 2.4% from concentrated solar power and 19.7% from photovoltaic solar power.