In a country known for its ample sunshine and scarce electricity, one might expect solar panels to be welcomed with open arms. But South Africa’s latest policy manoeuvre suggests the sun may now have to ask for a visa.
Through General Notice 3142 of 2025, the International Trade Administration Commission (Itac) has published a proposal that could upend the country’s renewable energy landscape. Ostensibly aimed at promoting local manufacturing, the tariff review covers 82 input materials and components used in wind, solar photovoltaic (PV), and battery storage systems — from solar panels and inverters to aluminium frames and even humble nuts and bolts. Yes, even screws may no longer cross the border with impunity.
Itac’s argument? That decarbonisation is a golden opportunity — a gateway to building domestic capacity and boosting industrialisation. In theory, by adjusting tariffs upwards to World Trade Organisation (WTO) bound rates — the highest permissible under global trade rules — South Africa can nudge investors into setting up factories rather than relying on cheap imports. Local jobs, local factories, and local pride, the story goes.
But beneath the surface of this policy ambition lies a more complicated reality, one already rippling through the solar industry.
From Load-Shedding to Head-Scratching
For years, as Eskom’s grid crumbled under the weight of maintenance backlogs, debt, and a growing population, ordinary South Africans took matters into their own hands. Rooftop solar became both a symbol of resistance and a practical lifeline, keeping lights on during rolling blackouts. Installations soared — not because of policy, but often in spite of it.
Then came the inevitable paperwork.
Small-Scale Embedded Generation (SSEG) rules now require homes and businesses with grid-tied solar systems to register them with local municipalities. What sounds reasonable in principle — tracking and integrating distributed generation — has, in practice, become a regulatory obstacle course.
“The rollout has been chaotic,” says Johanna Horz, chief of staff at Wetility, a Sandton-based solar startup backed by MultiChoice. “Some municipalities take weeks to process registrations; others don’t have the systems to handle them at all.”
With delays, ambiguity, and surprise fees, many customers are pausing — or cancelling — planned installations. For a company like Wetility, which raised $48 million in 2023 to fuel its expansion, this is more than a hiccup. It’s a threat to the viability of the entire business model.
And now, the possibility of higher tariffs on imported components — the very building blocks of their installations — adds yet another layer of uncertainty.
Eskom, meanwhile, has tried to strike a middle ground. It acknowledges that unregistered solar systems can pose technical and safety risks, especially to maintenance crews. To soften the blow, it introduced a temporary waiver on registration fees for systems under 50kW. But the utility also warns of penalties for non-compliance — a carrot-and-stick strategy that has left installers and homeowners in a regulatory limbo.
This ambiguity has led some to wonder if the real motive is less about safety and more about survival — of municipal revenue. After all, electricity sales account for up to 40% of local government income. As solar eats into this base, the incentives to frustrate the shift become more political than technical.
A Stellenbosch University study warned in 2017 that grid-tied solar could shrink municipal revenue by 2.4%. That figure is almost certainly higher today. And in a fiscally strained country, losing even a sliver of dependable income is no laughing matter — even if it comes at the cost of progress.
A Global Norm, a Local Mess
Regulating distributed solar isn’t inherently controversial. Countries like Germany and the U.S. do it routinely — through prosumer programmes and net metering schemes. But the difference lies in capacity and coherence. South Africa’s municipal patchwork, under-resourced and digitally fragmented, has made implementation lopsided at best.
“The intent behind SSEG isn’t unreasonable,” Horz says. “But without a streamlined process, the industry is getting whiplash.”
That whiplash is now being compounded by the possibility of import tariffs on essential components. For manufacturers, that’s a dream. For installers, a nightmare. For consumers? Likely a higher quote for that rooftop array they hoped would finally liberate them from Eskom’s faltering grid.
Meanwhile, the Itac review even questions whether the rebate on solar panel imports — a long-standing incentive — should be removed. It’s a curious proposition in a country trying to accelerate renewable adoption. One could be forgiven for wondering whether the policy architects believe that higher prices and more red tape are the keys to market growth.
And yet, the logic persists: more barriers, more domestic capacity — someday. The review also includes proposals to ease import controls on critical minerals (good), while mulling over export controls to protect supply chains for local battery production (possibly good, if not overdone).
When the Cure Risks Becoming the Disease
The renewable sector — especially solar — has been one of the few areas of South Africa’s economy to exhibit real dynamism. Now, it faces a slowdown. The shift in rhetoric from “solar is freedom” to “solar is a headache” is already taking root, as one industry stakeholder, speaking anonymously, observed.
Ironically, the very regulations and tariffs being proposed to protect and grow the sector may instead smother it.
And as load-shedding creeps back into headlines in 2025, the timing couldn’t be more symbolic. In the global clean energy transition, South Africa’s path now seems less like a leap toward the future and more like a bureaucratic waltz — one step forward, two tariffs back.
The sun still shines brightly. It’s just the policy forecast that remains cloudy.