• Individuals can claim back up to 25 percent of the cost of solar PV panels as part of a new incentive.
• Only the cost of the solar PV panels can be claimed on, and not inverters, batteries or generators.
• The rebate only applies to solar PV panels used for the first time between 1st March 2023 and 29th February 2024.

Today saw Minister of Finance Enoch Godongwana tabling the Budget Speech for 2023. As promised by President Cyril Ramaphosa, the minister highlighted a tax incentive aimed at individuals who are looking to install solar power.

“Individuals who install rooftop solar panels from 1 March 2023 will be able to claim a rebate of 25 per cent of the cost of the panels, up to a maximum of R15 000. This can be used to reduce their tax liability in the 2023/24 tax year. This incentive will be available for one year,” the minister said.

The incentive is available to all individuals but not businesses which are getting their own incentive.

Essentially, if you install R40 000 worth of solar panels you would be able to claim back 25 percent of that fee, or R10 000. Unfortunately the more you spend the closer you get to that R15 000 cap.

Furthermore there are a number of requirements citizens would need to meet in order to qualify for the rebate.

These requirements are:

• Only new and unused solar PV panels qualify but those who already have solar power can extend their system and take advantage of this rebate;
• Each panel must have a minimum output of at least 275W;
• The panels must be installed at a residence that is primarily used for domestic purposes. The installation needs a certificate of compliance in terms of the Electrical Installation Regulations of 2009;
• The solar panels must form part of a system that is connected to the main distribution board of a private residence;
• This rebate is applicable to solar PV panels purchased for use for the first time between 1st March 2023 and 29th February 2024.

Importantly, this rebate does not include batteries, inverters or fittings. The installation cost of solar power is also no covered.

“While an inverter and batteries are required to use solar panels, inverters and batteries can be operated without solar panels – in which case they offer no additional capacity to the system. The focus on solar PV panels is to maximise the use of limited government funds to get as much additional generation capacity as possible – and recognises that government will have to focus on a partial rebate of the components that are most directly linked to generation . This is why installation costs are not included either,” explains the Treasury.

Those wishing to claim the rebate should make sure they have both a VAT invoice indicating the cost of the solar PV panels separate from other components. Be sure that this cost is separate from other components of your installation. A proof of payment must also be provided, as must the certificate of compliance indicating the solar PV panels were used for the first time between 1st March 2023 and 29th February 2024.

This is specifically for individuals but government has said it will consult with body corporates and sectional title holders should they wish to take advantage of this rebate as well.

Importantly, while government will not try to recoup these costs should you sell your home, there will be a claw back of the rebate should the solar panels be sold within one year after they were brought into use. This is reportedly counter potential abuse.

While it may not be the 125 percent taxable income reduction businesses are getting, 25 percent back from your solar PV panels is better than a slap in the face. If you’ve been considering a solar power solution, it may be worth exploring from 1st March.

This may also be worth a consideration for landlords who will also be able to claim the rebate.

[Image – CC 0 Pixabay]