Earlier this year, a local solar manufacturer in South Africa’s that is only 100% locally-owned solar panel manufacturer – lodged an application proposing the introduction of tariffs on all imported crystalline silicon photovoltaic modules. They argue this would retain local production capacity and jobs – enabling the South African solar industry to grow significantly.
Following years of mismanagement and high-level corruption, the major energy crisis in the country has left the grid devastated – with rolling blackouts losing the economy approximately $284 million dollars every day. State-owned Eskom, which generates approximately 95% of South Africa’s energy, also required an emergency $355 million bailout in April to stop a catastrophic debt default.
Clearly, radical change is needed in South Africa but could import tariffs really be a viable solution to the country’s energy crisis?
If passed, the import tariffs could see the price of PV modules rise by 10% overnight. The 10% tariff will, ultimately, be passed down to the customer or installer in the form of increased product prices – which could see demand plummet and profit margins squeezed, particularly for smaller distributors.”
Solar energy is a far more sustainable answer to Eskom’s coal-powered plants and Orbic Solar is providing a number of solutions to help remedy the problems faced in South Africa. However, the proposed tariffs would see prices rise for its product ranges from overseas manufacturers such as JA Solar, Canadian Solar , Jinko and Cinco – which, ultimately, would have a detrimental effect on the positive shift towards solar power.
South African Government support is also a major headache and that, and in order for this type of tariff to be effective, the policy and regulatory environment must provide support and growth of the renewables sector. “For example, China and the US has seen explosive growth in solar PV power generation due to positive support from their governments and they are continually adjusting solar energy targets upward in line with demand – which increased from 10% in 2012 to 55% in 2017,” California’s new solar mandate means all new homes in the state must now be built with solar energy systems already installed, whilst Hawaii has mandated 100% renewable energy for its electrical grid by 2045.”
However, these scenarios seem sadly unlikely in South Africa amidst corruption claims. Solar and wind combined make up only 0.1% of the national energy supply, whilst 70% of the country’s energy is generated by coal; as such, Andy says it “seems more likely the proposed import tariffs would make it explicitly easier for the state-owned Eskom to keep its monopoly on energy supply in South Africa.”
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