The South African Photovoltaic Industry Association (SAPVIA) has warned that a blanket tax on solar imports in South Africa could damage the country’s renewable energy industry rather than strengthen it.
This is the feedback from Dr Rethabile Melamu, the CEO of SAPVIA, who said that building and protecting a local renewable manufacturing industry is important, but the process can’t be rushed.
In an interview with Classic Business, she said SAPVIA has repeatedly warned against imposing broad tariffs across the solar value chain.
“This whole umbrella approach to slapping in tariffs across all the components will only hurt the industry,” she said.
However, she added that the association supports targeted protection and incentives for sectors where local firms can realistically compete.
“That’s why we’re saying don’t have an umbrella approach to supporting or protecting local industry,” said Melamu.
“Even with minimal support, these companies can really thrive and manufacture for the local industry, but they are well poised to also export to other parts of the continent.”
South Africa’s rapid solar buildout over the past few years made it unrealistic to expect the country to establish a fully-fledged local manufacturing industry in a short period.
“Most of the deployed capacity, 10 gigawatts of installed capacity, close to 11 gigawatts—eight of those have come in the past three to four years,” said Melamu.
“Because of the rapid deployment of solar PV, it is really impossible to put all the industrialisation support mechanisms to drive localisation in such a brief period of time.”
Melamu said countries such as China spent decades building up their industries before seeing results.
“It took China well more than 20 years to put all sorts of instruments in place to support their solar PV industry, and they’re beginning to reap the benefits now,” she said.
“For us to be expected to build an entire industrial solar PV base in two to three years when we have energy security challenges was pretty much almost impossible.”
No point in large-scale solar module manufacturing in South Africa
Melamu noted that some companies had previously attempted to establish local manufacturing facilities in South Africa, but inconsistent procurement programmes undermined these efforts.
“Because of the nature of the stop-start of the RE programme, some of these facilities ended up closing in the mid-2010s,” she said.
She argued that South Africa should avoid trying to build a large-scale solar module manufacturing industry and instead focus on areas where it already has expertise and capacity.
“Let’s look at components where we already have capabilities, capacity, and competencies.”
She highlighted cable manufacturing and solar tracker systems as examples where South African companies are already competitive.
“South Africa has serious capabilities in cable manufacturing, whether it’s DC or AC cables. With certainty of uptake, we could really scale that and compete globally,” she said.
Melamu said studies commissioned by SAPVIA identified several components where South Africa has both comparative and competitive advantages and could eventually export products to Europe and elsewhere in Africa.
She also cautioned against focusing too heavily on solar module factories, arguing that other parts of the value chain create more jobs.
“A gigawatt factory in China is run by a robot or a couple of individuals, whilst you can employ tens if not hundreds of people for manufacturing the various components that fit into what we call the balance of plant,” she said.
Melamu said South Africa should adopt a long-term industrial strategy spanning 10 to 20 years, particularly if it wants to become competitive in batteries and energy storage.
She added that no single intervention would make South Africa globally competitive and that a mix of incentives, development finance, procurement support, and targeted tariffs would be required.
“If you hope that slapping a tariff on a component will build a formidable industry, I think we may need to rethink that strategy as a country.”
Melamu also stressed that grid constraints remain one of the biggest barriers to renewable energy expansion and industrialisation.
“One of the biggest barriers to the rapid uptake of renewable energy projects in general, but solar PV specifically, is the constraint in grid capacity,” she said.
She warned that unless grid infrastructure expansion accelerates, South Africa’s broader industrial ambitions could suffer.
