By: Anna Majavu
Low-priced imported solar panels and modules could soon be flooding the market, and SMMEs in the solar energy industry might be the losers. The International Trade Administration Commission (ITAC) applied for a temporary rebate facility for solar modules and panels made up of photovoltaic cells on 25 August, saying that this might be “necessary to assist with local renewable energy manufacturing”.
ITAC is the public entity that oversees tariffs and import and export control. Photovoltaic (PV) cells, also known as solar cells, convert direct sunlight into electricity and are key components of solar energy systems. ITAC believed that waiving the duty via a rebate could lead to a reduction in the cost of installation of the solar system, communications manager Thalukanyo Nangammbi told Vutivi News.
If the temporary rebate was approved, then “to the extent that SMMEs import solar panels, the proposed rebate provision will be beneficial to them by enabling the duty-free importation of the panels that meet the qualification criteria for the rebate”, Nangammbi added. However, two industry experts warn that a temporary rebate could work against the expansion of SMMEs into solar panel manufacturing.
Green energy Just Transition researcher and author Woodrajh Aroun said it conflicted with the government’s SA Energy Renewable Masterplan (SAREM), which committed the government to supporting the establishment of local solar panel manufacturing industries. According to Aroun, between 2010 and 2022, South Africa spent R136 billion on importing solar panels, inverters, lithium-ion batteries, and wind turbines, which he described as a “staggering amount”. “SAREM has an elaborate localisation strategy for the use of technologies such as solar PV, wind, and lithium-ion batteries. But SMMEs will never be able to enter this value chain unless there is a strong emphasis on localisation and local content,” Aroun said.
Trade analyst Anneke Jansen van Vuuren of XA Global Trade Advisors said ITAC had ignored an application by South Africa’s only locally owned solar panel manufacturer, ARTsolar, made 53 months ago, in which they asked for a 10% duty increase to be levied against imported PV modules or panels. ARTsolar argued at the time that a tariff was necessary because there was no protection for PV manufacturers in the South African Customs Union, and a number of PV module and panel manufacturers had shut down due to high competition from low-priced imports. “In the meantime, 53 months have passed, and this application has still not been finalised and so [PV panel imports] remain duty-free,” said Jansen van Vuuren, describing the new ITAC application for a temporary rebate as “odd”.
