The South African government is considering a significant change in its tariff structure for renewable energy products imported from other countries, with the aim of promoting local manufacturing. This move has sparked concerns among stakeholders who worry about the potential impact on energy prices and the broader green energy sector.
On April 17, 2025, the International Trade Administration Commission of South Africa (ITAC) published a gazette outlining a review of the tariff structure for materials, components, and finished goods used in the renewable energy value chain. This review covers a wide range of products, including solar panels, wind turbine components, lithium-ion batteries, steel and aluminium structures, and even basic items like screws, bolts, and nuts used in renewable energy installations.
The Rationale Behind the Review
ITAC has stated that the review is driven by the growing global push for decarbonization and renewable energy adoption. These international commitments present significant opportunities for South Africa to grow its own renewable energy supply chain, potentially positioning the country as a key player in regional and global markets.
According to ITAC, the country’s domestic demand for renewable energy products, the availability of raw materials, and its existing manufacturing expertise could provide a solid foundation for local production. ITAC aims to determine whether the country has the capacity to produce the components and goods currently being imported, which could encourage the development of a self-sustaining renewable energy sector.
Potential Impact of Tariff Increases
As part of the review, ITAC is considering raising tariffs on imported renewable energy products to the maximum rates allowed under World Trade Organization (WTO) rules. These WTO-bound rates would set the highest permissible duties on these goods, which could make imported products more expensive for South African consumers and businesses.
In addition to tariff increases, ITAC is considering adjustments to rebates, particularly the existing rebate on imported solar panels. The commission is also exploring the possibility of introducing new local-content provisions to incentivize the use of domestically produced components in renewable energy installations.
ITAC believes that a “carefully balanced” tariff structure could create a dual benefit: boosting demand for locally manufactured renewable energy products and improving their competitiveness in both the domestic and international markets. This, in turn, could help strengthen South Africa’s renewable energy sector, create local jobs, and improve the country’s export potential.
Seeking Public Input and Stakeholder Feedback
ITAC has opened a public consultation process, inviting industry stakeholders and members of the public to submit comments on the proposed tariff changes. This is an opportunity for stakeholders to provide input on whether there is sufficient local manufacturing capacity to support the proposed changes and whether these measures will drive growth in South Africa’s renewable energy industry.
Additionally, ITAC is considering whether relaxing import controls on critical minerals—such as lithium, used in battery manufacturing—could incentivize local production. It is also exploring whether imposing export controls on these minerals could help secure a steady domestic supply for the growing battery production market.
The Path Forward
Industry stakeholders have four weeks from the publication date to submit their feedback on the proposed tariff changes. The government will carefully consider all input before making any final decisions on the structure of the tariff system and its potential impact on the renewable energy sector.
As South Africa continues to grapple with its energy crisis, this review could play a pivotal role in shaping the future of the country’s renewable energy landscape. While there are clear advantages to local manufacturing, stakeholders are cautious about the impact of increased tariffs on energy costs and the availability of affordable renewable energy products.
The proposed tariff changes by ITAC reflect South Africa’s growing ambition to strengthen its position in the global renewable energy market. However, as the country looks to promote local manufacturing, it will need to strike a careful balance between encouraging industry growth and ensuring that the transition to renewable energy remains affordable and accessible for all South Africans. The outcomes of this consultation process could have far-reaching consequences for the future of South Africa’s renewable energy sector.
