Solar importer loses most of tariff case, but wins on cables

ORANJESTAD — A solar panel company in Aruba has lost most of a court case against Customs over import duties on mounting and connection materials. However, the Court ruled in the company’s favor on electrical cables, which remain subject to the lower 2% import duty.

The dispute involved roofing bolts, clamps, nuts, screws and cables imported between 2020 and 2022. The company declared the goods as solar panel components, which carry a 2% tariff.

Following an inspection, Customs concluded that most of the materials belonged in higher tariff categories subject to 6% import duty and issued three additional assessments totaling more than Afl. 33,000.

The Court largely agreed with Customs. It ruled that bolts, clamps, nuts and screws do not play a direct role in generating electricity. Although they are necessary to mount solar panels, they must be classified under their own customs categories and therefore attract the higher tariff.

The outcome was different for cables. Although cables do not generate electricity themselves, they carry the electricity produced by the panels to the rest of the system.

A 2011 ministerial policy in Aruba provides a favorable 2% tariff for electrical components intended exclusively for solar-energy systems. Customs already applies this rate to inverters and batteries, and the Court ruled that cables should be treated the same way.

As a result, the additional assessment on the cables must be reduced to 2%, while the other two assessments remain in place.

The ruling is significant for Aruba’s solar industry because local companies rely heavily on imported equipment, meaning import duties directly affect the cost of solar projects.