Renewable energy localisation in South Africa could transform the country’s growing investment in clean energy into stronger domestic industries, new skills, and secure employment. South Africa already has firms capable of manufacturing renewable energy components. However, irregular demand, weak enforcement, manipulated exemptions, and continued reliance on imports have limited the sector’s development and contributed to factory closures and job losses.
South Africa is expanding its investment in wind, solar, battery storage, and electricity transmission. Public procurement programmes, including the Renewable Energy Independent Power Producer Procurement Programme, are intended to ensure that some of this investment supports domestic goods and services. Local content requirements can be applied through minimum thresholds, points awarded during bid evaluation, or the designation of particular goods that must be sourced locally.
Yet targets on paper do not necessarily translate into orders for South African manufacturers. Long delays between procurement rounds make demand unpredictable, discouraging firms from investing in equipment, retaining workers, or expanding their production capacity. When local manufacturers lose workers and productive capacity, they become less able to meet future orders, reinforcing the case for further exemptions and imports.
Exemptions from local content requirements are also being used too frequently. Local suppliers may be deemed too expensive, too slow, or unable to meet technical specifications. However, firms can be given unrealistic specifications or extremely short delivery periods, making imported alternatives appear necessary. Orders are sometimes placed so late that manufacturers cannot secure inputs, prepare production lines, recall workers, or train new employees in time.
Tariff evasion compounds the problem. The misclassification of imported renewable energy components can reduce the duties paid on them, making the price difference between imported and locally manufactured products appear larger. Meanwhile, limited state capacity means that local content commitments are often verified only after contracts have been awarded and projects are already under way.
A more effective localisation strategy requires local content to be verified before contracts are awarded. Bidders should obtain certification from the South African Bureau of Standards and face meaningful penalties when they fail to meet their commitments. Procurement bodies also need sufficient technical capacity to assess exemption requests, while all approved exemptions should be publicly gazetted with clear reasons.
Local manufacturers must receive orders early enough to prepare and should be paid a significant proportion of the contract value upfront to help finance materials and production. Customs verification should identify tariff evasion, while tariff policy and local content rules should work together to create fair conditions for domestic firms.
Public support must also be conditional on the creation of decent work. With substantial renewable energy investment expected in the coming years, South Africa must choose whether this spending will deepen dependence on imported equipment or help build a resilient domestic manufacturing base. Effective localisation can support stronger firms, expanded skills, secure jobs, and a renewable energy industry capable of contributing to a just transition.
About the project
This publication is an output of Advancing a Just Energy Transition: Localisation, Decent Work, and Sustainable Livelihoods, a multi-country research project examining the energy sectors of Ghana, Kenya, and South Africa in the context of global decarbonisation. The project investigates how localisation, decent work, gender equity, SMME participation, and sustainable livelihoods can be embedded in renewable energy production networks to strengthen local manufacturing and avoid reproducing unequal global economic patterns.