Solar energy players are lobbying to scrap a newly-imposed 5% import tariff on solar panels, Al Mal reports. The Solar Energy Development Association (SEDA) has sent a letter to Electricity Minister Mohamed Shaker requesting that the ministry cancel the duty, warning that the new levy will hurt the industry. “Egypt’s solar energy market is still trying to get on its feet and can barely afford to face more challenges,” a member of the industry body separately told Enterprise yesterday.

The fee was introduced in November as part of a bundle of customs hikes introduced by the Madbouly government as it looks to raise revenues. Previously exempt from tariffs, photovoltaic cells and solar panels are now subject to a 5% import tax, raising costs for local industry.

The solar industry is already under pressure from rising commodity + shipping prices: Rising shipping costs and surging prices of metals such as aluminum, steel and copper last year have squeezed margins and contributed to some projects being delayed.

SEDA members pessimistic: Members of the association, which includes more than 100 companies and investors in Egypt’s fast-growing solar industry, are downbeat on how the charge will affect the sector. The costs of constructing new solar stations will rise by 10% due to the tariff, Al Mal quotes Ahmed Hamdy, founder of Africa Solar Power, as saying. The newspaper also quotes Hatem Tawfik, managing director of Cairo Solar, as having said it will likely reduce the return on investment in the sector and hit demand.

*** Read Going Green: We recently took a look at how rising commodity prices are affecting Egypt’s local solar industry.