South Africa Considers Tariff Increase On PV Modules Amid Industry Challenges

Amisec (Pty) Ltd, operating under the brand ARTsolar, has submitted an application to the International Trade Administration Commission (ITAC) of South Africa, proposing an increase in customs duties for crystalline silicon photovoltaic modules (PV modules/solar panels). These modules are currently classified under tariff subheading 8541.43 and are imported duty-free.

The application seeks to introduce a new 8-digit tariff subheading with a WTO-bound rate of 10% ad valorem, citing challenges faced by the domestic manufacturing industry. Key factors influencing the application include recent disinvestment by local manufacturers due to competition from low-cost imports, a significant decline in production levels and capacity utilization, and diminishing market share and profitability.

According to ITAC’s assessment, local manufacturers of PV modules/solar panels have encountered substantial price disparities compared to imported products, resulting in economic losses, reduced employment opportunities, and minimal investment in the sector. The proposed tariff adjustment aims to protect and rejuvenate the remaining domestic manufacturers, attract new investments, and promote local sourcing of inputs to strengthen the industry’s value chain.

The Commission’s recommendation to implement a 10% ad valorem customs duty on PV modules/solar panels under tariff subheading 8541.40.10 (new 8541.43) is geared towards improving production capacity utilization, achieving economies of scale, and fostering job creation both directly and indirectly within the sector.

Additionally, ITAC suggests a review of the duty structure after three years from implementation to evaluate the industry’s performance and determine future adjustments as necessary.

This proposal marks a pivotal step in South Africa’s strategy to support its local PV module manufacturing sector amidst global market challenges and seeks to enhance domestic production capabilities for sustainable economic growth.