Government wants to make solar panels and batteries more expensive in South Africa

The government wants to increase the price of renewable energy products imported from other countries to promote local manufacturing, which has raised concerns among stakeholders. 

On 17 April 2025, the International Trade Administration Commission of South Africa (ITAC) gazetted a review of the tariff structure for input materials, components, and final goods within the renewable energy value chain.

According to ITAC, the review covers 82 tariff codes linked to inputs and final goods used in renewable energy and storage systems. 

This includes solar panels, wind turbine components, lithium-ion batteries, steel and aluminium structures, and even screws, bolts, and nuts used in green energy installations.

The commission stated that the review is driven by opportunities arising from global decarbonisation commitments. 

“These commitments present new opportunities for the growth of a strong South African supply base of renewable energy components and finished products,” ITAC said. 

It added that South Africa’s domestic demand, raw material availability, and manufacturing experience could position it as a key player in regional and global supply chains.

ITAC is seeking public comment on the possibility of raising tariffs on the listed items to their World Trade Organisation (WTO) bound rates. These rates are the maximum duties allowed under international trade rules.

The commission wants to engage with stakeholders to determine whether local capacity exists to produce the items listed. 

The ITAC is also considering introducing or removing rebates, particularly the existing rebate on imported solar panels, and considering new local-content provisions.

The commission said that a “carefully balanced” tariff structure could boost both demand for and the competitiveness of locally made products, enhance export opportunities, and strengthen the domestic renewable energy sector.

ITAC has invited input on whether relaxing import controls on critical minerals might incentivise local production. 

Additionally, it is reviewing whether export controls on these minerals could help secure the domestic supply, especially for battery manufacturing.

Industry stakeholders and the public have four weeks from the publication date to submit comments on the proposed changes.

The full Gazette containing General Notice 3142 of 2025 can be viewed below.

Concerns of unintended consequences

Industry stakeholders have noted the gazette and called for an extensive consultation process and a complete value chain analysis to avoid adverse effects from a hasty decision. 

The South African Photovoltaic Industry Association (SAPVIA) said that it is currently engaging with its members to gather input for a comprehensive written response.

However, it raised several concerns about the proposals, including the timeframe given for comment, their rationale, the discontinuation of the solar PV module rebate, and their focus on manufacturing. 

“We are currently engaging our members to gather input and will submit a comprehensive written response by the provided deadline,” said SAPVIA CEO Rethabile Melamu.

“SAPVIA has initiated direct discussions with the International Trade Administration Commission (ITAC) to ensure our sector’s perspectives are fully considered.” 

However, while SAPVIA plans to submit a detailed position based on our members’ inputs in our formal submission, Melamu highlighted several key concerns at this stage.

Firstly, he said the time provided for representations (four weeks) is too short to allow industry to make comprehensive submissions.

“Additionally, the rationale provided for the tariff review does not align with existing government strategies,” said Melamu.

“These strategies include the South African Renewable Energy Masterplan, the Integrated Resource Plan, or our Nationally Determined Contributions.” 

According to the ITAC, the proposed tariffs are believed to support the creation of manufacturing-related jobs. 

However, Melamu pointed out that most employment opportunities in the solar PV sector are generated during project deployment and installation phases, not necessarily in manufacturing.

He explained that, for example, a PV module assembly plant with a capacity of 500 MW typically employs only 60 to 100 people, as these processes are largely automated. 

In contrast, manufacturing mounting structures can create ten times more jobs, with hundreds of new ones created as the technology is deployed. 

As a result, he stressed that a comprehensive value chain analysis, including a detailed assessment of employment potential across the entire PV value chain, must guide any introduction of tariffs on solar components. 

Melamu also criticised the ITAC recommendations to discontinue the solar PV module rebate, which he argued would be highly detrimental to the sector. 

“Our view is that the current local manufacturing capacity is less than 15% of domestic demand and is likely to decrease based on the project pipeline,” he said. 

Melamu added that scaling to 50% or more of domestic demand will take several years and hinge on a stable electricity supply.

Considering all these concerns, Melamu said the association would provide a complete statement and data-driven submission in the coming weeks and remains committed to constructive engagement with the government.

“We will aim to ensure that any tariff-related decisions support both industrial development and South Africa’s renewable energy transition,” he said.