Call for big inverter, battery, and solar shake-up in South Africa – MyBroadband
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Following the rapid uptake of renewable energy products such as solar power generation in recent years, the Competition Commission of South Africa has proposed some policy changes for the sector.
The Competition Commission released the findings of its survey of competition in the renewable energy sector on Wednesday, 28 August 2024.
It noted three key aspects it wants to address: the lack of local manufacturers, disparities in pricing policies in the sector, and consumer ignorance of renewable energy products.
Although South Africa has experienced a long-lasting reprieve from load-shedding — the primary driver behind renewable energy uptake in recent years — policy developments locally and globally indicate that the renewable sector will have a long future in the country.
Competition Commission policy analysts Sithabiso Buthelezi and Engetelani Ndobela spoke about the need to implement policy interventions in the sector.
“The increasing demand by households and businesses for renewable energy products in South Africa requires policymakers and regulators to facilitate policy interventions that can address their energy access needs,” they said.
Speaking to eNCA, Buthelezi emphasised the need for localisation in manufacturing renewable energy products.
“A finding that is key is the need for localisation. Most of the products we have observed that they are imported from overseas,” said Buthelezi
“There’s competition at a distribution level where there are a lot of distributors; also, at a retail level, there’s competition.”
“We find that at a manufacturing level, there’s not a lot of South African local players,” he added.
The Competition Commission also highlighted other key concerns about the renewable energy sector, including the unaffordability of products to many South African residents.
To this end, it proposes investigating potential excessive pricing and collusion in the sector and facilitating financial mechanisms to lower barriers for low-income households and small businesses.
It also noted that there are no enforced standards for renewable energy products to ensure they are fit for purpose.
The Competition Commission also wants to improve consumer awareness surrounding renewable energy products in South Africa.
The table below summarises the Competition Commission’s identified challenges and proposed policy actions for the renewable energy sector.
| Aspect | Challenge | Proposed policy actions |
| Market access | Most renewable products aren’t manufactured locally and are imported from overseas. |
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| Cost | Despite prices falling globally, most South African consumers consider prices to be unaffordable. |
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| Standards | There is an absence of concrete standards set out for these products. |
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| Consumer education | Consumers lack knowledge of where products come from and their rights as consumers, particularly when selecting installers. |
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Win for local manufacturers
Regarding the lack of localisation in solar panel manufacturing, South African producers could see a substantial boost. Finance Minister Enoch Godongwana gazetted a 10% import tax on solar panels in late July 2024.
The change states that “photovoltaic cells assembled in modules or made up into panels” are now subject to a 10% general import duty.
The changes are part of South Africa’s National Renewable Energy Master Plan, published by the Department of Mineral Resources and Energy.
It aims to bolster local demand for renewable energy, drive industrial development, and support emerging suppliers and local capabilities.
Local producer Artsolar first called for an import duty on solar panel imports in 2017, and welcomed the newly-gazetted duty.
“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 could cause for foreign manufacturers but said it is a great way to boost the local industry.
“We are expecting new entrants and expanding the locally available value chain due to this protection,” it added.
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