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Nqobile Bhebhe, [email protected]

THE Zimbabwe Energy Regulatory Authority (Zera) has recommended the scrapping of value-added tax (VAT) on a range of solar products in a bid to incentivise investments in large-scale solar projects to help combat electricity challenges.

Due to frequent power cuts being experienced across the country as industry activity increases, solar energy has emerged as a readily available and efficient alternative source of power for both industrial and household use.

However, the high costs associated with solar appliance importation and installation remain a significant barrier for many who wish to utilise solar energy in their spaces.

In recent years, these ongoing power interruptions have prompted many businesses and households to seek out more reliable sources of energy, including solar power.

Government has made notable progress in facilitating the importation of solar appliances by eliminating duties on select items.

However, the exemption applies only to specific solar products, determined by their respective tariff codes.

For example, solar inverters are subject to duty, whereas only lithium batteries are subject to Value Added Tax.

Players in the sector are of the view that VAT should also be scrapped to incentivise locals to import solar products.

Speaking during a stakeholder consultation process in Bulawayo yesterday, Zera Technical Director, Engineer  Misheck Siyakhatshana said the regulatory authority has made representations to the Government on scrapping  VAT.

“We have made representations to the Government and the recent one was last week to the Ministry of Finance, Economic Development, and Investment Promotion to have VAT removed from solar PV products and energy efficiency products,” he said.

“Our thinking is that we have electricity shortages in the country, and it is not wise to have taxes on products that seek to reduce energy deficiencies. 

“So, we think the Government will consider this given the current conditions we are at in terms of power generation. This will be part of incentivising people to import products.”

The view among energy experts is that the removal of VAT would result in a direct reduction in the initial costs associated with renewable energy technologies, including solar panels, batteries, inverters, and other essential components.

By abolishing VAT, the financial barrier to renewable energy systems will diminish, in the process enabling a broader segment of the population to adopt these sustainable solutions.

It will also be expected to stimulate demand for renewable energy products, leading to a more robust and dynamic market.

Zimbabwe has abundant sunshine, receiving an impressive average of seven and a half hours of sunlight each day.

As a result, experts in the energy sector believe the country has the potential to generate sufficient power for domestic consumption and even export electricity if solar energy is fully harnessed.

In recent years, more local companies have started using renewable energy such as solar as the country is increasing its focus on developing alternative clean energy sources.

The country has already made an ambitious commitment to reduce carbon emissions by 40 percent on its Low Emission Development Strategy (LEDS) by 2030 through providing communities with alternative energy and proper waste management.

To complement this effort more local companies have started using renewable energy such as solar while broader initiatives such as investing in new smaller hydro-power plants, wind and establishment of bio-digesters in rural areas are being worked on.

For instance, Rainbow Tourism Group (RTG) has installed a 300kVA solar plant at one of its operations — Kadoma Hotel and Conference Centre reducing costs at the facility by about 48 percent.

Mining firms have also taken the initiative to reduce over-reliance on energy from the national grid.

Victoria Falls Stock Exchange (VFEX) listed resources group Caledonia Mining Corporation Plc, constructed a 12,2MW solar plant at its Gwanda-based gold producer Blanket Mine.