The government’s attempt to protect the local manufacturing of solar panels may ironically end up slowing the country’s renewable energy plan. This was the warning from Pieter du Plessis, Chief Operating Officer of XA Global Trade Advisors, during a recent webinar on the functioning of the rebate system for solar panels.
By Jasper Raats, senior journalist at African Farming and Landbouweekblad
According to Du Plessis, the International Trade Administration Commission (ITAC) has imposed a 10% import tariff on photovoltaic (PV) panels to boost the local industry – in line with the renewable energy master plan. At the same time, however, a rebate mechanism was introduced to ensure that the country’s energy expansion plan is not derailed by shortages in local production.
Rebate System Fails To Match Industry Pace And Needs
The core of the problem, says Du Plessis, lies in the way ITAC calculates rebate volumes. Applicants now often receive only about 20% of their actual project needs, based on a formula that mainly considers historical import data and estimated local production.
“This approach doesn’t work for a sector where financial arrangements and project contracts are concluded quickly and volumes grow exponentially,” he explained. “Historical data says nothing about the six major projects that want to start importing next month.”
In addition, the rules only allow one application every 12 months. This means that companies with large projects are stuck with insufficient quotas and have no chance of review during the year.
The result is that projects with sharply increasing demand for new, larger and more efficient panels (600 to 800 watts) are caught in a stranglehold. Local manufacturing cannot keep pace with the technological advances or the volumes required.
“Contractors and developers face costs and unpredictability – exactly what the rebate system was supposed to prevent,” said Du Plessis.
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Cooperation Essential
Du Plessis believes the solution does not lie in legal action or individual letters, but in joint pressure, transparent processes and better data:
- A confidential platform where projects can share their real volume and technology needs, so ITAC can calculate quotas more accurately;
- A return to the model that works in the steel industry: companies obtain a waiver letter from local manufacturers if they cannot supply the required products, after which full import rights are granted; and
- Collaboration with industry organisations to provide coordination and weight to negotiations.
Du Plessis said he firmly believes the intention behind the tariff and rebate is to promote local industrial development, but it needs to be applied better so as not to sink the country’s much-needed solar expansion.
“We are stuck with a system that benefits no one – not the local manufacturers, and certainly not the projects meant to relieve the country’s power crisis,” Du Plessis concluded.
