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Loadshedding | Tax incentive on solar installation for individuals during the 2023/2024 tax season

Discover our series of articles introduced by our members on loadshedding | Article #5 Reflect All

The basic characteristics and requirements for the solar panel incentive announced by the Minister of Finance on 22 February 2023, came just at the right time to encourage individuals to invest in generating or supplement their electricity supply. The incentive is to help the individuals in their immediate decision making, rather than postponing.

CAN THE INCENTIVE BE CLAIMED?

Yes, if you are an individual who pay personal income tax. The rebate can be claimed against their tax liability. This rebate is not intended for installations of generators but only to new or unused solar photovoltaic (PV) panels. The installation can be a partial, add on to an existing or new installation. The only important decision is that the installation should mead with the minimum capacity of 275W panel (design output). Additional batteries, portable panels, installation cost or fittings as ad-on to the installation will not be claimable expense.  The PV installation must be for domestic purposes and connected to the main distribution of private residence.

HOW MUCH CAN BE CLAIMED?

The value of 25% up to a maximum of R15 000 per individual can be claimed for the first time in the period of 1 March 2023 until 29 February 2024.

For example, a person buys 10 solar PV panels, at a cost of R4000 per panel (so total cost of R40 000). That person would be able to claim 25% of the cost up to R15 000, so R10 000.

A different person is able to buy 20 panels at a cost of R4000 per panel (so total cost of R80 000). The calculation of 25% adds up to R20 000, but they can only claim R15 000.

An individual claiming in the 2023/24 filing season, will have to be a invoice with the cost of the PV solar panels separately from additional items along with the proof of payment. A Certificate of Compliance (COC) as proof of installation.

ARE YOU A TENANT? CAN IT BE CLAIMED?

Yes, there are no ownership limitation when claiming. You can be the landlord or the tenant, the only proof that makes it eligible, is the party who paid for the installation in order to claim the rebate.

DO I REPAY SARS WHEN SELLING MY HOME?

No, as solar panels remain as a fixed asset to the house and used by the following owner. The new owner can’t claim the rebate. No recoupment after you sell your house and this will still assist with expansion in additional electricity supply. A claw back on the rebate should the PV solar panels be sold within a one year after they were first brought.

Should further details need to be obtained with the above information, please contact Natasha on 011 664 6648/082 336 0266 or by email: natasha(@)reflectallacc.co.za