The big hope for solar in South Africa

South Africa’s solar tax break for individuals is set to end at the end of this month, and there is hope that Finance Minister Enoch Godongwana will announce an extension in the upcoming budget.

After load shedding started to reach record highs in 2022, Godongwana announced a solar tax break in the 2023 Budget, offering R15,000 rebates for individuals looking to install solar panels.

This only applies to new solar panels and not other component costs, such as inverters and batteries, as they are not part of a solar generation system.

That said, the rebate for individuals will end on 29 February 2024. Businesses have an extra year to use the rebate, as their deadline is 28 February 2025.

Bradd Bendall, Interim CEO of BetterBond, said that it would be better to extend the tax break amid the difficult economic environment facing South African consumers.

“South African homeowners will be hoping that this week’s National Budget includes an extension of the government’s incentive programme to help households finance solar installations, given ongoing disruptions to power supply, and rising electricity costs,” Bendall said.

As households have faced many economic headwinds over the past year, such as high interest rates and cost of living increases, he said that an extension of the incentive could create some breathing room for cash-strapped consumers.

May not happen

However, Phillip Joubert from the SAIPA Centre of Tax Excellence said that it is doubtful that the Treasury will extend the rebate for individuals.

Joubert noted that Treasury held numerous public consultations after publishing various Tax Laws Amendment Bills, and the contrast between the household and business deadlines was debated.

“During these consultations and hearings, the Treasury remained steadfast in its position, indicating no willingness to alter the duration of this incentive,” he said.

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