Install solar panels and receive a tax break

Bradley Prior

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Install solar panels and receive a tax break

South Africa’s government, energy regulator and Eskom have often been criticised for obstructing the introduction of distributed, small-scale embedded generation (SSEG) which would help businesses to cut costs and ensure the stability of their power supply during load shedding.

But in fact, there are significant and far-sighted tax breaks which have been put in place by National Treasury to encourage and incentivise business owners to install their own generation in the form of grid-tied, rooftop or ground-mounted solar PV systems on buildings, parking lots, warehouses, factories, and farms.
 

Napalm2880

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Where the company tax rate is 28% and payment is upfront, a 100% tax-deductible depreciation allowance in the year of installation and commissioning will result in a 28% nett discount on the purchase price of the system at the end of the tax year.
Can someone dumb this down for the non business owners and those that failed accounting?
 

Zoomzoom

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Can someone dumb this down for the non business owners and those that failed accounting?

If you don't own a business, you can suck eggs.

But basically there is a maximum allowed percentage for depreciation - if your asset is valued at R100K X percent of that = depreciation. In the example, this amounts to 28%. Actually it is more complicated than that - in reality you can only claim back a percentage of the percentage for depreciation not the total depreciation, but for solar panels you are allowed to claim back the full depreciation of 100% of the capital invested over 3 years.
 
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Lupus

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Explains why the Makro across from Clearwater has a big solar array now and Randpark ridge shopping center.
 
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Rabobi

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The way i read it is that everyone should register their panels for the time guvmint decides it should be taxed, and then they have your details
 

ToxicBunny

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This is all well and good for businesses....

BUT, they need taxbreaks for the residential market... if they did that Solar usage would literally skyrocket.

Just as a for example, following the depreciation aspect for businesses, if I could write the installation cost of my solar install off over 3 years, I wouldn't even hesitate to pull the trigger and go full on with the install to the point that the house could easily survive off-grid.
 

Rocket-Boy

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This is all well and good for businesses....

BUT, they need taxbreaks for the residential market... if they did that Solar usage would literally skyrocket.
Exactly this, there should be an incentive for residential customers, it would raise the amount of solar being used which would lower the prices.
Municipalities dont want this though, they make a lot of money by selling electricity.
 

ToxicBunny

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Exactly this, there should be an incentive for residential customers, it would raise the amount of solar being used which would lower the prices.
Municipalities dont want this though, they make a lot of money by selling electricity.
100%... but we seriously need to figure out how to make the 2 worlds co-exist...
At least in Durban, its not like the money I spend on electricity is doing anything other than paying for the power, and fixing the broken infrastructure and a bit of corruption from the ex-Mayor (may she rot in hell)
 

Odracir

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Can one as a registered business install solar units at home (as storage space for the business) and claim that way?
 

ToxicBunny

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Can one as a registered business install solar units at home (as storage space for the business) and claim that way?
Its an interesting tact, and one I wouldn't be surprised to find out has been tried and possibly shot down by SARS...

I think the intention is for solar installations at main business operating premises.
 

Vrotappel

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Misleading Headline

Should be

Tax breaks for companies who install solar power systems
And if the business owner did not know this they should get themselves better accountants and tax advisors.
 

Rocket-Boy

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This is one way to lessen the burdon on Eskom.
Its way more complicated than that.
Eskom cant supply the required power all of the time, they however dont want you to make your own solution to the problem.
If they are not able to sell all of the electricity that they generate then they are in trouble too.
So they have now got themselves into a very tricky situation where they cant supply but they also need you to keep buying what they can supply.
 

Swa

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Can someone dumb this down for the non business owners and those that failed accounting?
A business can write off assets due to depreciation over a period of 3 years or more. In this case though you can write off the whole amount in one year for installations under 1MW. It's technically not a tax break though as you pay tax again on the difference in value when selling.

Why grid-tied only?
Businesses can't go off grid.
 
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