In an effort to establish local solar manufacturing capabilities, South Africa has imposed a 10% import tariff on solar PV module and cell imported into the country. Previously, these products were exempt from import duties. The legislation was signed by the country's Finance Minister, Enoch Godongwana, on June 28 and took immediate effect. This decision was made against the backdrop of a surge in solar power installations in the country.
In the first half of 2023, with increasing power cuts, over 5GW of rooftop solar were installed nationwide in South Africa.
According to the International Trade Administration Commission of South Africa (Itac), the introduction of this tariff law considered multiple factors, including rising electricity prices, the nascent stage of the local PV module industry, the shutdown of many manufacturers due to fierce competition from low-cost imports, significant market share decline, and the deteriorating profitability of the local market.
However, PV module products from EU/UK (European Union/United Kingdom), EFTA (European Free Trade Association), SADC (Southern African Development Community), MERCOSUR (Southern Common Market), and AfCFTA (African Continental Free Trade Area) countries and regions are still eligible for tariff exemptions.
Donald MacKay, director of XA Global Trade Advisors in South Africa, stated that over the past 12 months, South Africa imported solar modules worth 13 billion rand. If these measures are implemented, South Africa will achieve 1.3 billion rand in tariffs.
However, the tariff hike has been opposed by PV product importers, who argue that it will lead to increased costs and job losses. They suggest that the government explore other incentives to support local manufacturers instead of raising tariffs. Additionally, importers claim that local solar products are of lower quality and that South Africa lacks the technology to produce globally applicable panels.
On the other hand, Viren Gosai, general manager of ArtSolar, stated that the local PV manufacturing industry can ensure the country's economic recovery by creating sustainable job opportunities and supporting local education and training programs.
Local manufacturing also aligns with sustainable development goals by reducing carbon emissions associated with transportation. It also means that the local industry is less susceptible to global supply chain fluctuations.
Source：DateBM