South Africa’s International Trade Administration Commission (ITAC) has introduced a 10% tariff on imports of crystalline silicon photovoltaic modules and panels to protect local manufacturers.
This tariff, now in effect, aims to address the disinvestment of domestic manufacturers due to competition from cheaper imports and the large reduction in local production and sales.
The tariff was requested by ARTsolar, a South African solar panel producer, which highlighted that manufacturers faced a lack of “meaningful local work” since the last Renewable Energy Independent Power Producer Programme project ended.
ARTsolar also noted that companies like JA Powerway, Solitaire Direct, SMA, and Jinko Solar have ceased regional production due to market conditions.
ITAC believes the 10% customs duty will help protect remaining local manufacturers, attract new investments, and encourage the localisation of certain inputs.
The tariff is expected to help domestic manufacturers achieve economies of scale and create jobs, both directly and indirectly, with a review of the duty structure after three years.
Reaction
The South African Photovoltaic Industry Association (SAPVIA) expressed surprise at the imposition of the duty without formal industry consultation. SAPVIA CEO, Rethabile Melamu, warned that the 10% price increase would likely be passed on to consumers, potentially causing problems or delays.
The association estimates local module assembly capacity at around 620 MW annually, significantly lower than the current demand. SAPVIA contends that the immediate introduction of the duty is not ideal given the existing capacity limitations.
Melamu also highlighted the limited localisation of upstream components and the reliance on imported parts for module assembly.
Despite recent declines in module prices, SAPVIA notes that module costs constitute a significant portion of total solar capital expenditure – from 30% to 45% for rooftop solar and 20 – 35% for carport and ground mount.
