Good news for solar panel prices

Cape Town-based solar installer AWPower doesn’t see the 10% import duty on solar panels as a significant concern and doesn’t believe it will result in fewer imports to South Africa.

While the new tax will lead to higher prices from international manufacturers, solar panels will still be affordable for South African homeowners and businesses.

Finance minister Enoch Godongwana gazetted the new tax on 28 June 2024, stating that “photovoltaic cells assembled in modules or made up into panels” are now subject to a 10% general import duty.

AWPower managing director Christiaan Hattingh told MyBroadband that the impact of the new duty on installers would depend on how and when suppliers implement the increase from their side.

“In short, panels will now be 10% more expensive. We don’t see this as a concern as panels will still be affordable,” he said.

“Now, and even with the increase, is still the best time to invest in solar.”

Hattingh added that while he doesn’t believe it will lead to fewer solar panel imports, local manufacturers are selling high-quality products.

However, he noted that these options are limited.

“The driving factors for the South African market are firstly affordability and then quality and availability. They need to tick those boxes,” added Hattingh.

The new duty’s implementation forms part of South Africa’s National Renewable Energy Master Plan.

It aims to bolster local demand for renewable energy, progress industrial development, and help the development of emerging suppliers and local manufacturing.

ARTSolar, a South African solar energy equipment supplier, called for the government to impose a duty on solar panel imports in 2017.

“In recent years, the push towards renewable energy has become increasingly vital in addressing climate change and energy security concerns,” it said.

“One key aspect of this transition is the development and support of local solar panel PV manufacturing and its related value chains.”

It acknowledged the challenges the change would cause for foreign producers, but it said the tax would be a great way to support the local industry.

“We are expecting new entrants and expanding the locally available value chain due to this protection,” ARTSolar added.

It added that the move would continue to support the national electricity grid by reducing demand while alleviating unemployment in South Africa.

That will include supporting skilled jobs in various sectors, such as research and development, manufacturing, installation, and maintenance.

Regarding the difference in pricing between locally manufactured and imported solar panels, a MyBroadband analysis recently revealed that locally assembled solar panels compete fairly well on pricing.

We compared the prices of ARTSolar’s panels with similar Chinese models available from major online solar and backup power stores.

ARTSolar’s units have a 12-year product guarantee and a 30-year linear power guarantee. However, the company currently only lists three models on its website, with capacities ranging from 500W to 550W.

Its 500W model is the most affordable at R1,811, while the cheapest comparable Chinese-made model is a 555W Jinko Solar panel, priced at R1,625.

It should be noted that ARTSolar’s model range of 500W, 545W, and 550W makes it challenging to compare to imported panels.

Therefore, we also considered common similar sizes — 505W, 555W, and 565W.

The 550W ARTSolar model costs just R61 more than the 500W unit, so it would be the better value-for-money choice.

Adding the 10% import tax to internationally manufactured units would make ARTSolar’s pricing more competitive.

The table below compares the prices of solar panels from local manufacturer ARTSolar with major Chinese brands available from well-known online retailers.