Latest news with #InternationalTradeAdministrationCommission
IOL News
16-05-2025
- Business
- IOL News
Clouds on solar horizon
Why should Eskom users be penalised because they also have solar panels? South Africa enters winter with a cautiously optimistic outlook: for the first time in years, the dreaded spectre of loadshedding may retreat - provided that unplanned outages remain below 13GW. This fragile hope rests not only on improved Eskom performance, but significantly on the rapid adoption of rooftop solar. More than 6GW of decentralised generation has been added by households and businesses investing in energy independence, easing pressure on the national grid. However, this vital momentum is now under threat. The International Trade Administration Commission's proposal to impose import duties of up to 30% on a wide range of solar components could drastically inflate installation costs. At a time when South Africa should be removing barriers to alternative energy, ITAC risks making solar unattainable for many, especially the middle class and small enterprises that have driven its recent growth. Compounding this is Eskom's new Retail Tariff Plan. From last month, solar users still connected to the grid are being billed an additional Generation Capacity Charge - currently at 20% but set to increase. While it is reasonable that Eskom seeks to recover infrstructure costs, this approach undermines the very users who have helped stabilise the grid. Penalising energy-conscious citizens with high fixed charges discourages investment in solar and punishes those reducing their reliance on a failing system. South Africa's energy recovery depends on a balanced strategy. Eskom must be supported to maintain and improve its generation capacity, but not at the cost of the country's fastest-growing and most promising energy sector. Any fixed charges should be proportionate, transparent and structured to reflect actual grid usage, not to recoup lost revenue from declining demand. Instead of discouraging decentralised energy, policymakers should protect and accelerate it. Grid stability and solar expansion are not mutually exclusive - they are mutually reinforcing. South Africa cannot afford to get this equation wrong.
IOL News
29-04-2025
- Business
- IOL News
Warning signs emerge as ITAC reviews tariffs for renewable energy sector
In the past year, R6.3 billion-worth of solar panels were imported. Image: Armand Hough/Independent Newspapers The renewable energy sector in South Africa faces potential upheaval as the International Trade Administration Commission (ITAC) reviews 82 tariff codes, a move which has been flagged by industry experts as having more penalties than incentives. As various stakeholders await the final review, expected by the end of the year, the implications of the proposed changes could reshape the landscape for manufacturers and importers in the renewable energy value chain. XA Global Trade Advisors CEO Donald Mackay on Friday the review looked to increase tariffs on 82 tariff codes in the renewable energy value chain, which was a really big deal. "I am not proposing for a second ITAC. It will automatically increase tariffs on everything. But if they were to increase it to the rate they want to take it up to, it would take the total duty liability from R370 million to about R7.2 billion," Mackay said at a webinar for industry to discuss the ongoing review. "That's a healthy increase in tariffs. But again to be clear, I don't think it's likely all of this will go up but the problem is we don't know where it will go up." Mackay said the review was in four stages. The first focuses on tariff adjustments aimed at reducing import duties and removing rebates for solar panels. The second stage addresses localisation, which seeks to enhance local content in solar and storage components, up from the current percentages of 45% for solar PV to 50% by 2030, and from 20% to 60% for storage. To enforce this, ITAC is considering export controls on essential minerals, including lithium, manganese, and vanadium, to drive local beneficiation. The third element of the review concerns subsidies, which are anticipated to facilitate additional income tax deductions for businesses engaged in the renewable energy sector. The proposed transformation fund aims to uplift black South Africans, particularly women, within this industry, financed by a levy of 1.5% on project construction costs and an additional 2% on after-tax profits. While this bold initiative aims to encourage inclusivity, it also introduces a complex layer of financial obligations for companies involved. Mackay pointed out the unusual duality in the proposal: while companies may receive extra tax deductions, they are simultaneously faced with increased levies for contributing to the renewable energy market. The intricacies of these plans—still lacking complete clarity—set the stage for a challenging few years ahead, as the industry adapts to a rapidly changing regulatory environment. "It's the plan to 2030, we are in the first stage of it and we don't have more detail on this," Mackay said.
