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South Africa considers petition calling for tariffs on imported solar modulesTags£ºPhotovoltaic tariffs  PV modules  South Africa 

Solar panel maker ARTsolar has filed a petition with the International Trade Administration Commission of South Africa  , seeking customs tariffs on all imported crystalline silicon PV panels.

In the document, submitted at the end of March, the manufacturer complained there was no protection for module manufacturers in the country, as existed in the U.S. Europe, although in the latter case trade measures were lifted last year.

“A number of photovoltaic module/panel manufacturers had ceased their production operations in the SACU region due to high competition from low-priced imports,” the petitioner wrote, in reference to the Southern African Customs Union area which also includes Botswana, Lesotho, Namibia Eswatini.

Rising costs

y Pegg, CEO of the SegenSolar (Pty) Ltd South African subsidiary of U.K. solar distributor Segen Ltd, said the introduction of import tariffs could see the price of PV modules  rise by 10% overnight in South Africa. “The 10% tariff will, ultimately, be passed down to the customer or installer in the form of increased product prices – which could see dem plummet profit margins squeezed, particularly for smaller distributors,” he told pv magazine.

Pegg added, the major problem with tariffs in South Africa would be the lack of government support for the sector. For tariffs to be effective, he said, the policy regulatory environment must support the growth supply of the renewables sector. “For example, China has seen explosive growth in solar PV power generation due to continually adjusting its solar energy targets upward in line with dem – which increased from 10% in 2012 to 55% in 2017,” he said.

It’s all about Eskom

Pegg also highlighted the operational financial problems of state-owned utility Eskomas a hicap to the country’s energy sector. Last month, Eskom required an emergency $355 million bailout to prevent a debt default when it was already struggling to fix crippling power shortages. Media reports claimed the utility also failed to receive ZAR7 billion ($485 million) in loan payments from the Chinese Development Bank this month.

“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,” Pegg said.

chris Ahlfeldt, energy specialist at Blue Horizon Energy Consulting Services, said tariffs would probably have a net negative impact on jobs for the domestic solar industry, adding they would slow down customer adoption through higher prices. “Solar PV installers create many more local jobs than the manufacturing industry globally, so the focus should be on accelerating growth in the industry as a whole to create jobs not slowing it down with tariffs,” he said to pv magazine.

‘Incentives, not penalties’

According to Ahlfeldt, the best way to incentivize localization of industry is by creating stable dem. Rather than introducing tariffs, he said, the government should focus on enabling regulations for the industry more regular procurement for utility scale projects. “South Africa’s REIPPPP [Renewable Energy Independent Power Producer Program] already has localization requirements but delays in the program contributed to closure of most of the local module assembly capacity over the past few years, from companies like Solairedirect, SunPower Jinko Solar,” he said.

Alfehldt added South Africa is part of the World Trade Organization, so new tariffs could result in trade law violations as they have in other countries.

The South African government was expected to launch a new 1.8 GW REIPPP round last yearbut Eskom’s troubles may have stymied that plan. Early this year, president Cyril Ramaphosa announced a plan to rescue Eskom by splitting it into three units. Consultants Frost & Sullivan said that move could encourage renewables even if it is not enough to fully address the utility’s financial crisis.

Eskom’s debt pile stood at around ZAR419.2 billion at the end of September, according to its financial results. The utility is the only buyer of the power generated under the REIPPP its lack of funds pushed it to delay the signing of several PPAs awarded in rounds 3.5 four of the program.

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