As households and businesses with capital increasingly move towards renewable energy (solar + batteries), Eskom is left serving a shrinking base of paying customers while remaining responsible for electricity as a social good.
This dynamic places upward pressure on tariffs, weakens cross-subsidization, and fuels a growing perception that renewable energy benefits only those who can afford it. According to the Mzansi Energy Consortium, the clean energy transition risks becoming socially and economically divisive. A paradox where environmentally clean power entrenches socially dirty inequality.
Equipment Import Taxation Policy Misaligned with Global Industry Reality
Wessel Wessels, COO at Mzansi Energy Consortium and Founder and CEO of Journey2Green, says the government may be misguided in taxing the importation of equipment. “While the ambition to develop domestic manufacturing capacity is understandable, it is misaligned with the realities of the global renewable energy industry.
Solar panels, batteries, and inverters are produced at an enormous scale in highly automated facilities, particularly in Asia. A single modern production line can manufacture twice as many solar panels as South Africa consumes annually, employing as few as 50 people with robotics performing most of the work,” Wessels explains.
What also mustn’t be underestimated is the importance of safety for renewable energy products, especially BESS (Battery Energy Storage Systems). It takes a huge investment, and to make those investments, you need economies of scale. For example, the total number of kWhs that just one major battery manufacturer damages annually as part of its safety testing is more than the total annual current kWhs manufactured in South Africa. Automation plays a huge role in manufacturing renewable energy technology.
“By imposing duties and penalties on imported renewable energy equipment, the government effectively increases the cost of up to 90% of a solar project’s capital expenditure, the technology component. The unintended consequence is that the remaining 10%—labor, services, installation, and operations—is squeezed. But that is precisely where job creation should occur. Manufacturing may create a small number of wealthy local beneficiaries, but it will not create jobs at the scale South Africa needs. Rather, reduce the cost of that 90% and induce the EPC market to budget more for labor,” says Wessels.
Labor is the portion where broad-based, sustainable job creation is realistic: the services component of renewable energy projects. Installation, commissioning, operation, and maintenance are labor-intensive activities that can be anchored in rural and underserved communities where projects are built. while freeing up space for local contractors and skills development.”
International technology vendors assume responsibility for complex system integration early on, while gradually training local teams to manage larger parts of the work in future projects. Over time, this enhances domestic capability without sacrificing safety, performance, or bankability.
