Plan to make solar panels and batteries more expensive in South Africa

The South African government wants to increase the price of renewable energy products imported into the country to promote local manufacturing.

Industry players have raised concerns over possible consequences, including the South African Photovoltaic Industry Association (Sapvia) and the South African Wind Energy Association (Sawea).

In mid-April 2025, the International Trade Administration Commission of South Africa (ITAC) published a notice in the government gazette, reviewing the tariff structure for various products used in the renewable energy value chain.

This includes the solar photovoltaic, wind energy, and battery energy storage value chains. The notice also details proposed increased ordinary customs duties on products used in these industries.

“When carefully balanced, an improved tariff structure will increase demand for, as well as the supply competitiveness of locally manufactured products and components,” the ITAC says.

“This will further enable export market opportunities, and will enhance the competitiveness of the local renewable value chain.”

The document lists the current applicable duty rate and the bound rate of duty for each component or material.

The bound rate refers to the maximum customs duty a World Trade Organisation (WTO) member country can implement for a specific product.

The ITAC’s review will consider increasing the applicable duty rate within these limits.

For example, no customs duty is currently added to imports of copper wire. However, the bound rate is 10%, meaning the review could consider increasing this to anything from 1% to 10%.

Another example, relating to the battery energy storage value chain, is the tariffs applied to electrical accumulators, including lead-acid, nickel-cadmium, nickel-metal hydride, and lithium-ion materials.

Lead-acid cells with dimensions not exceeding 185mm (length) x 125mm (width) x 195mm (height), have a current applicable rate of 5%, while the maximum tariff allowed would be 30%.

Nickel-cadmium, nickel-metal hydride, lithium-ion, and other accumulators currently have no applicable tariff rate. Each of these tariffs could be increased to a maximum of 15%.

Two major renewable energy associations raise concerns

In a statement responding to the ITAC’s review, Sapvia CEO Rethabile Melamu said the association would prepare its submission but highlighted several concerns about the review.

Sapvia believes the four-week timeframe, ending 17 May 2025, is too short to allow for comprehensive submissions.

It also believes that the rationale behind the review doesn’t align with existing government strategies, such as the Renewable Energy Masterplan and Integrated Resource Plan.

Sapvia contends that the review’s purpose of supporting the creation of manufacturing-related jobs could be misguided.

It argued that most employment opportunities in the renewable energy sector exist in the deployment and installation phases of renewable energy projects.

Using the example of a photovoltaic module assembly plant with a capacity of 500MW, it said such a plant would generally employ 60 to 100 people, as many processes are largely automated.

“In contrast, the manufacturing of mounting structures can create ten times more jobs, with hundreds employed in the deployment of the technology,” Sapvia said.

Sapvia also warned that discontinuing the solar photovoltaic module rebate would harm the sector.

Sawea said it supports the government’s long-term vision to bolster localisation and expand South African manufacturing capabilities. However, it believes more extensive consultation is required.

“We are currently engaging with our members to fully understand and unpack the implications of this proposed tariff review,” said Sawea CEO Niveshen Govender.

“In continuing our efforts to advance wind energy in South Africa, we believe that it is necessary to initiate a deeper investigation into the impacts of potential tariffs on the local industry.”

The tables below summarise the current applicable and bound rates for various solar PV and battery energy storage value chain products as listed in the ITAC’s government gazette notice.

Solar PV value chain

Battery energy storage value chain