Page 14 - Issue 4 2023

VIEWS AND OPINION

Budget Speech: Response to solar

panel tax rebate

By Kiran Molloy, Energize intern

“This is not just Eskom’s and the government’s problem, but ours as well” - Henkemans

rom 1 March 2023 businesses and individuals will be able
to claim for money spent on solar panels for the generation
Fof electricity in their tax returns for the 2023/24 tax year.
Businesses which invest in renewable energy generation,
regardless of size, will be able to claim a rebate of 125% of the
cost of the investment. Individuals who install solar panels at
their homes will be able to claim a reimbursement of 25% of the
price of the PV panel installation, up to a maximum of R15 000.
The incentive will be available to businesses for two years, and
to private households for one year.
“The announcement is very welcome as a positive step.
Not only will this reduce the country’s reliance on the national
grid and ease pressure on Eskom, but it is also a significant of solar systems. At best those who install panels will only get up
development towards promoting clean energy and reducing to R15 000 back from their taxable income,” she added.
the country’s carbon footprint,” says Roger Hislop, the energy However, according to SAPVIA, a solar hybrid system could
management systems executive at CBI Energy. cost up to R200 000, with the panels being one of the least
Solar is one of the more affordable renewable energy expensive components in the system, compared to the storage
options, with rent-to-own packages carrying similar costs to battery and invertor that would have to accompany it for power
current electrical bills, and can be used for up to 80% of a at night. While solar panels could provide a household with
household’s electrical requirements during load shedding. between 6 and 7 kW of power, this would only be available
This would also allow households to sidestep the increasing during strong sunlight hours.
electricity tariffs in April (18,65%) and next year (12,74%). SAPVIA’s comments are valid. One cannot use PV panels on
“Additionally, with this purported tax incentive, solar could their own. They need to be connected to an inverter in order to
become South Africa’s energy generation solution of choice in provide power to the house or business. Therefore, as generous
the coming years, especially if government takes additional steps as this incentive is, it does not go far enough – especially
to promote its use,” says Snoeck Henkemans, the managing for households which are offered a far lower incentive than
director of Alumo Energy. businesses are – and should have offered an incentive for a
For businesses this could prove to be a costly venture; complete solution, not just for the PV panels.
however the loan scheme implemented during the Covid Nonetheless, this tax concession is unique and reveals
pandemic could assist businesses to obtain renewable energy. Government’s tacit acknowledgement of its responsibility for
Furthermore, Hislop advises that businesses should pay the electricity crisis. We feel that the tax incentive should have
careful attention to load management to prevent their inverter been offered on the complete system, not just the PV panels.
from being overloaded, and monitor their electricity meter to And what about those who have already installed such systems?
identify unnecessarily draining appliances. Should they not be able to benefit from this incentive too?
After over 200 days of load shedding in 2022, the incentive It seems to us that by offering this incentive, the government
is meant to encourage self-generation and renewable forms of is basically calling on South Africans to install PV solar panels at
energy generation; however some experts in renewable energy their homes and businesses to mitigate the devastating effects
have some doubts. of ongoing lengthy periods of load shedding. It also adds support
“Solar panels alone do not protect end users against load to frequent statements made by experts who have warned us
shedding”, says Dr Rethabile Melamu, CEO of the South African that the electricity crisis is far from over and that load shedding
Solar PV Industry Association (SAPVIA). will be with us for a long time yet.
“The solar panel incentive is limited and does not address We think that all South Africans who can, should take
those households that can’t access instruments for the purchase advantage of this offer.

14 | energize Issue 4 | 2023 SUBSCRIBE FREE