As the push for sustainable energy gains momentum, claiming solar rebates becomes increasingly essential. In this blog, we’ll discuss solar rebates in South Africa and guide you on how to claim them.
How to Claim Solar Rebate in South Africa?
Solar rebates are financial rewards offered by governments or utility companies to promote the adoption of solar energy systems. Their purpose is to make solar energy more affordable and accessible for both homeowners and businesses. Before learning about how to claim a solar rebate in South Africa (SA), you need to first discover the requirements for solar rebates here.
Requirements for Solar Rebates in South Africa
The following requirements need to be met before claiming a solar rebate in South Africa-
- The solar rebate is applicable only for new and unused solar PV panels to add to the country’s energy capacity.
- Qualified solar PV panels must have a minimum capacity of 275W per panel (design output).
- Other components such as batteries, inverters, fittings, or diesel generators, and installation costs are not eligible for the rebate.
- Portable panels do not qualify for the rebate.
- The solar PV panels must be installed at a residence primarily used for domestic purposes and comply with the Electrical Installation Regulations, 2009.
- The installation must be proven with a certificate of compliance for safety and regulatory compliance.
- The solar PV panels must be part of a system connected to the main distribution of the private residence.
- The rebate applies to solar PV panels brought into use for the first time between March 1, 2023, and February 29, 2024.
How to Apply for Solar Rebate in South Africa?
To get the rebate in the 2023/2024 filing season, you need to provide:
- A valid VAT invoice showing the cost of solar panels separately from installation fees.
- Proof of payment for the invoice.
- A Certificate of Compliance proving that the solar panels were used for the first time between March 1, 2023, and February 29, 2024.
After learning about the above prerequisites, let’s see how to claim a solar rebate in South Africa with the following steps:
Step 1: Install new solar panels at your home between 1 March 2023 and 29 February 2024.
Step 2: Make sure the panels meet the requirements, like having a minimum capacity of 275 W and being part of a connected system.
Step 3: Get a certificate of compliance for the panels.
Step 4: Pay your income tax in South Africa.
Step 5: If you are employed, include the solar rebate in your income tax return for the year ending on 28 February 2024 (starting from 1 July 2024).
Step 6: If you are a provisional taxpayer (self-employed), deduct the solar rebate in your provisional tax returns for February and August 2023. Deduct the solar rebate in your final income tax return for the year starting from 1 July 2024.
Note: For accurate information and guidance on claiming the solar rebate based on your situation, seek advice from a tax professional or accountant.
After understanding how to claim solar rebates in South Africa, you must be curious to learn whether you pay tax on solar panels in South Africa or not.
Do You Pay Tax on Solar Panels in South Africa?
You don’t have to pay tax on solar panels in South Africa. But if you install new solar panels at your home, you can get some money back as a rebate from the government. Now, after learning this, let’s also explore solar tax incentives in South Africa.
What are the Tax Incentives for Solar in South Africa?
There are solar tax incentives in South Africa for both individuals and businesses:
1. For Individuals
Individuals who install rooftop solar panels can get a 25% rebate on the cost of new or unused solar panels, up to a maximum of R15,000. To get the full rebate, you’ll need to spend R60,000 on solar panels (24 panels at R2,500 each). The rebate varies for homes with fewer panels, ranging from R3,125 to R6,250, but keep in mind that the cost of the inverter and batteries is not included. While it’s a great incentive, it may not be practical or affordable for many South African households.
Also Read: What is Solar Rebate Adelaide Program?
2. For Businesses
The initial Section 12B capital allowance allows businesses to rapidly deduct 100% of the solar system’s initial costs when they start using it. From March 1, 2023, this allowance will increase to 125%.
For example, a company investing R150,000 in a solar system can benefit from:
- Reclaiming 15% VAT on the total installation charge (with a valid VAT invoice).
- Income tax savings of 27% for companies. If the R150,000 is VAT exclusive, the income tax savings will be R40,500.
Harnessing solar energy through rebates in South Africa empowers citizens to play an active role in combating climate change and reducing reliance on fossil fuels. By navigating the solar rebate process, individuals and businesses can benefit from financial incentives, contributing to a greener and more sustainable future for the nation. To know more about solar rebates and incentives, check out our other blogs.