{"id":60092504,"date":"2025-07-31T17:17:03","date_gmt":"2025-07-31T16:17:03","guid":{"rendered":"https:\/\/dialogue.earth\/?p=60092504"},"modified":"2025-08-19T17:45:30","modified_gmt":"2025-08-19T16:45:30","slug":"south-africas-plan-to-raise-tariffs-on-renewable-energy-components-prompts-concern","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/energy\/south-africas-plan-to-raise-tariffs-on-renewable-energy-components-prompts-concern\/","title":{"rendered":"South Africa\u2019s plan to raise tariffs on renewable-energy components prompts concern"},"content":{"rendered":"\n

In a bid to boost local manufacturing, South Africa is considering raising tariffs on imported components used in solar, wind and battery storage products.

The proposals, announced<\/a> in April, are part of a broader government push to capitalise on the global transition towards renewable energy.<\/p>\n\n\n\n

They were put forward by the International Trade Administration Commission (Itac) which sits under the trade and industry department. While the commission maintains the measures could support local industrialisation and create jobs, various renewable-energy producers, labour organisations and policy experts say they may be counterproductive.<\/p>\n\n\n\n

The move may also have implications for South Africa\u2019s relationship with China, the global leader in manufacturing renewable-energy products.<\/p>\n\n\n\n

Tariffs for value addition<\/h2>\n\n\n\n

Itac described the motivations for the proposals:

\u201cGlobal decarbonisation commitments present new opportunities for the growth of a strong South African supply base of renewable-energy components and finished products, battery storage units, as well as green consumer goods… An improved tariff structure will increase demand for, as well as the supply-competitiveness of, locally manufactured products and components.\u201d<\/p>\n\n\n\n

It gave industry stakeholders and the public just four weeks to have their say on the proposals, which includes raising tariffs on certain components<\/a> to the respective rates allowed by the World Trade Organisation, if they can be made locally.<\/p>\n\n\n\n

Other measures proposed include: tariff rebates for some of those products which are input materials for downstream manufacturing and are not made in South Africa; the removal of an existing rebate for imported solar photovoltaic (PV) panels; and new export controls on materials needed for renewable-energy products, such as critical minerals.<\/p>\n\n\n\n

Dialogue Earth spoke to Khwezi Mabasa, a member of the Department of Trade, Industry and Competition\u2019s Industrialisation Think-Action Tank (Itat), and an economic and social policy advisor at Friedrich-Ebert-Stiftung South Africa. He noted that the proposals come in the context of three decades<\/a> of South African deindustrialisation, since trade liberalisation in the 1990s. Mabasa said failure to build capacity to manufacture certain renewable-energy components domestically would be a wasted opportunity to create value in the economy.<\/p>\n\n\n\n

\"buildings<\/div>
A wind farm at Gouda, Western Cape, South Africa. Experts are concerned that upping tariffs will raise the cost of South Africa\u2019s clean-energy transition (Image: Johann Van Tonder \/ Alamy)<\/div><\/div><\/div><\/div>\n\n\n\n

Industry concerns<\/h2>\n\n\n\n

Stakeholders who argued<\/a> that the four-week consultation period was too short said a proper analysis was needed to ensure any tariff-related decisions are supportive of both industrial development and South Africa\u2019s renewable-energy transition. The consultation length did not change, however, and the responses are currently being reviewed.<\/p>\n\n\n\n

Raising tariffs would \u201cincrease costs across the value chain\u201d responded<\/a> the South African Photovoltaic Industry Association (Sapvia), an industry body.<\/p>\n\n\n\n

Sapvia added this would make solar power less affordable and slow its adoption, resulting in higher electricity prices and lower public and investor support. While Sapvia is aligned with the goal of developing local manufacturing, it said at present capacity is unable to meet demand.<\/p>\n\n\n\n

Renewable-energy product manufacturers had similar concerns. Sean Naude, account manager at the Southern Africa arm of Sungrow<\/a>, a leading Chinese solar manufacturer, said the tariff rise would make solar products \u201cmuch more expensive\u201d and potentially impact the roll-out of renewable projects, as well as the cost of electricity.<\/p>\n\n\n\n

Responding to these concerns, the trade department\u2019s Mabasa said tariffs are just one part of a policy intervention package that includes subsidies for domestic producers of renewable-energy products. He said South African producers find themselves competing with imports that have been subsidised, and receiving either insufficient subsidies or none at all.<\/p>\n\n\n\n

Sapvia also expressed concern about a proposal to remove the current rebate on the import of solar PV panels, which is designed to exist only until local manufacturers can produce at least 50% of the panels South Africa needs. In its response<\/a>, Sapvia stated that \u201cpremature removal of the rebate risks increasing project costs, causing delays or cancellations, and ultimately undermining energy affordability, security and investor confidence\u201d.<\/p>\n\n\n\n

The industry association was, however, more supportive of the proposal to establish new rebates for key input products not manufactured in South Africa. It argues that this should be expanded to products used in battery-energy-storage systems, in order to support battery manufacturing in the country.<\/p>\n\n\n\n

Energy access<\/h2>\n\n\n\n

Another major concern is that the tariff increases would increase the cost of South Africa\u2019s energy transition.<\/p>\n\n\n\n

Coal generates over 80%<\/a> of the country\u2019s electricity and is a major employer. South Africa needs to ensure a just energy transition away from coal that minimises unemployment and economic dislocation. This must be achieved amidst a long-term energy crisis that manifests in rolling blackouts.<\/p>\n\n\n\n

\u201cI think the import duties being proposed are premature and shortsighted,\u201d Cobus van Staden, managing editor at the China-Global South Project, a non-profit, told Dialogue Earth.<\/p>\n\n\n\n

He suggests that the severity of South Africa\u2019s energy crisis is such that a large amount of these components should first be imported for the country to establish a foundation of smart and integrated grid technology and storage, which it can then use to build its own renewables industry.<\/p>\n\n\n\n

<\/div>
Recommended<\/span><\/span><\/div><\/a>\n\n\n\n

Boitumelo Molete, climate lead at the Congress of South African Trade Unions (Cosatu) and a commissioner on the country\u2019s Presidential Climate Commission (PCC), echoed concerns about rising costs.<\/p>\n\n\n\n

\u201cWe [Cosatu] are against any form of energy poverty,\u201d she said, adding that the only people who will benefit from the high prices are those in or close to the government.<\/p>\n\n\n\n

Tariffs for upskilling and just transition<\/h2>\n\n\n\n

According to Sapvia\u2019s statement, its members support reinvestment of any tariff revenue into industrial development, skills training and support for local manufacturers.<\/p>\n\n\n\n

Molete, representing the interests of organised labour, emphasised: \u201cIt is important to adopt ways in which workers will be re-skilled and upskilled in the emerging renewable-energy sector.\u201d<\/p>\n\n\n\n

Naude also noted there is a skills shortage in manufacturing renewable-energy products in South Africa, particularly of technicians and engineers.<\/p>\n\n\n\n

\u201cSungrow was established in 1997,\u201d he said. \u201cIt has taken years and years of perfecting the [solar PV] technology, so it\u2019s not something that can be done within months to start manufacturing high-quality technology products in the country. In the long term, hopefully it will yield the desired results; in the short term, it will have implications.\u201d<\/p>\n\n\n\n

Trade tensions<\/h2>\n\n\n\n

Van Staden, of the China-Global South Project, suggested the measures, if adopted, would add friction to South Africa\u2019s relationship with China. <\/p>\n\n\n\n

He said it is essential to keep in mind the role green-energy cooperation plays in its relationship with China, and shared efforts to modernise South Africa\u2019s energy system so it meets its power demands and carbon-emission goals. The country has signed nuclear<\/a>– and renewable<\/a>-energy agreements with China. \u201cEven if you start manufacturing [locally], you will have to use Chinese components and Chinese machines anyway,\u201d he added.<\/p>\n\n\n\n

Mabasa, of the trade department\u2019s think-tank, said the tariff changes should not harm the relationship between South Africa and China. In fact, China should be supportive of the plans because they will \u201cuplift communities\u201d and \u201crebuild jobs\u201d, he added.<\/p>\n\n\n\n

Trade union body Cosatu said in its response<\/a> to the Itac proposals that the South African government should \u201cnegotiate and launch a high-level industrial renewable-energy partnership with China to\u2026 support localisation of the solar, battery and wind value chains, coupled with technology-transfer agreements and decent work commitments [that respect workers\u2019 and human rights].\u201d<\/p>\n\n\n\n

Policy in the balance: The road ahead<\/h2>\n\n\n\n

When the tariffs could come into effect is not clear. But according to chief commissioner Ayabonga Cawe, Itac will make its recommendations once the consultation responses have been reviewed. There will then be another public consultation before a final report is submitted to the trade and finance ministers. They will either accept the recommendations, reject them, or ask the commission to make changes.<\/p>\n\n\n\n

These tariff plans have triggered much debate in South Africa. They have implications for the speed of the energy transition, the creation of jobs and the country\u2019s relationship with China. What seems like a small and technical policy proposal has become an important issue for the South African government and renewables industry.<\/p>\n","protected":false},"excerpt":{"rendered":"

Industry experts warn the plans, aimed at boosting domestic manufacturing, may be counterproductive<\/p>\n","protected":false},"author":50000804,"featured_media":60092532,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[758,757],"tags":[17073,585,600],"hashtags":[],"country":[50040754],"class_list":["post-60092504","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-energy","tag-energy-transition","tag-renewables","tag-trade","country-south-africa"],"acf":[],"yoast_head":"\nSouth Africa\u2019s plan to raise tariffs on renewable-energy components prompts concern | Dialogue Earth<\/title>\n<meta name=\"description\" content=\"Industry experts warn the plans, aimed at boosting domestic manufacturing, may be counterproductive\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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