Over the past two years, South Africa has added between 2.5 and 3 gigawatts of solar photovoltaic (PV) capacity, driven largely by embedded generation in the commercial and industrial sector, as well as a fast-growing private off-take market.
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South Africa’s rapid expansion in solar power is opening a window for industrial growth, but without coordinated policy support and a cautious approach to tariffs, the country risks missing out on the full economic benefits of the energy transition.
This is the warning from the South African Photovoltaic Industry Association (SAPVIA), which is urging government to adopt a comprehensive and pragmatic localisation strategy.
Over the past two years, South Africa has added between 2.5 and 3 gigawatts of solar photovoltaic (PV) capacity, driven largely by embedded generation in the commercial and industrial sector, as well as a fast-growing private off-take market.
The surge in rooftop solar installations, spurred by record levels of load shedding in 2023 and 202, has significantly reshaped the country’s electricity landscape, even though adoption has since moderated and is now stabilising.
Despite this strong demand, SAPVIA on Tuesday argued that local participation in the solar value chain remains limited. High-value components such as PV modules, inverters, trackers and lithium batteries are still predominantly imported, highlighting structural gaps in South Africa’s manufacturing ecosystem.
According to SAPVIA CEO, Dr Rethabile Melamu, the country is not yet converting its solar momentum into meaningful industrial growth.
Melamu said that without urgent policy alignment and a clear, long-term demand pipeline, the opportunity to build a competitive local manufacturing base could slip away.
“South Africa is experiencing a solar boom, but we are not yet fully translating that momentum into local industrial growth, especially in areas of the value chain where it makes sense to do so,” she said.
“Without urgent policy alignment and a clear, consistent demand pipeline, industrial support interventions including but not limited to long-term commitment to provision of manufacturing and tax incentives the opportunity to build a competitive local manufacturing sector could slip away.”
Melamu added that industrialisation efforts must also be underpinned by reliable and affordable electricity—an area where challenges persist.
SAPVIA has played a key role in shaping government frameworks such as the South African Renewable Energy Masterplan, which aims to align renewable energy deployment with industrial development and job creation.
While these initiatives signal strong intent, the association stressed that implementation must now accelerate, particularly in identifying segments where South Africa can realistically compete.
Encouragingly, some progress has been made. Local capabilities have developed in balance-of-system components such as mounting structures, cables and certain inverter technologies. These areas benefit from lower barriers to entry and leverage existing industrial strengths.
However, scaling production of more complex, high-value components remains challenging due to global competition, high input costs and infrastructure constraints.
SAPVIA cautioned against attempting to localise the entire value chain in the short term, arguing instead for a targeted approach focused on areas of competitive advantage.
“The goal is not blanket localisation, but smart localisation,” said Melamu.
“We need to identify where we can compete, where we can create jobs, and how we can integrate into regional and global value chains for that reason the current proposed of tariffs on components to be implemented gradually and cautiously, not to stifle energy security imperatives but strengthen local manufacturing and creating much needed jobs.
As renewable energy demand rises across the Southern African region, SAPVIA said South Africa has an opportunity to position itself as a manufacturing hub for the Southern African Development Community. This could unlock economies of scale and expand export potential, provided the right policy mix is in place.
SAPVIA insists that localisation and rapid deployment are not mutually exclusive. Instead, it said success will depend on strong coordination across energy, trade and industrial policy, alongside deeper collaboration between the public and private sectors.
To unlock this potential, the association is calling for immediate action in several areas: improved policy certainty across government departments, targeted industrial incentives linked to achievable localisation goals, investment in skills development, and upgrades to infrastructure and logistics systems.
“There is no trade-off between localisation and deployment if policy is well designed,” Melamu said. “We can, and must, do both. But this requires coordination across energy, industrial, and trade policy, as well as strong public-private collaboration.”
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