A South African solar manufacturer, ARTsolar, is taking the government and several renewable energy developers to court. The case focuses on local content rules for renewable energy projects. ARTsolar says it invested in new manufacturing capacity because it expected these rules to lead to orders for locally assembled solar panels. That did not happen.
Wikus Kruger has researched renewable energy financing and procurement in Africa for 15 years. He argues that the ARTsolar court case points to a deeper policy problem. Local manufacturing requirements were added to South Africa’s renewable energy programme without a clear industrial strategy. The government created obligations, but not the conditions needed for local production to succeed. The result has been conflict between manufacturers, developers and the state – and localisation efforts that have delivered far less than expected.
