Potential new jobs are at risk in the solar industry

The threat of additional import taxes on renewable energy products brought into South Africa is putting potential new jobs at risk, said Donald MacKay, founder and chief executive of XA Global Trade Advisors.

Speaking during a webinar on Friday morning, MacKay warned that tariffs proposed by the International Trade Administration Commission of South Africa (ITAC) could put 53 solar panel traders at risk.

In the past year, R6.3 billion-worth of solar panels were imported, said MacKay. He explained that R344 million was saved through tariff rebates on the value of these panels. 

ITAC, MacKay said, recently published a gazette in which “they said they are looking at the renewable energy value chain with a view to potentially adding some more protection in that value chain”.

In terms of the Renewable Energy Master Plan, government wants to have local content for solar panels increased to 50% from 45%, with local content provision on storage such as batteries increasing from 20% to 60%," MacKay explained. 

The Master Plan stated that localising the manufacturing of key components such as solar panels, inverters, wind turbine towers, cables, and batteries could result in more than 25 000 new direct jobs being created by 2030 and it would add billions to gross domestic product.

“If you decide you're going to increase the local content for a particular product, the cost of that product typically rises,” said MacKay. 

MacKay said the question is whether protecting the local manufacturing industry through additional tariffs will result in the creation of more jobs than what may well be lost. With additional tariffs in place, the cost to assemble will go up, which will disincentivise the sector.

Through adding tariffs, “you are creating a very small number of jobs for a very high cost per job,” MacKay told IOL.

IOL