20 February 2024
WHO CAN CLAIM THE INCENTIVE?
Individuals who pay personal income tax can claim the rebate against their tax liability. This rebate is not intended for solar installations at business premises.
WHAT CAN BE CLAIMED?
Individuals will be able to claim a rebate to the value of 25% of the cost of new and unused solar photovoltaic (PV) panels, up to a maximum of R15 000 per individual. 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.
WHAT ARE THE REQUIREMENTS?
Only new and unused solar PV panels qualify, to ensure that the capacity is in addition to what the country already has in place. The panels can be installed as part of a new system, or as an extension of an existing system.
Only solar PV panels with a minimum capacity of 275W per panel (design output) qualify for the rebate. Other components of a system – batteries, inverters, fittings or diesel generators – and installation costs do not qualify. Portable panels will also not qualify.
Solar PV panels must be installed at a residence that is mainly used by an individual for domestic purposes. The installation will have to be proved with a certificate of compliance in terms of the Electrical Installation Regulations, 2009 to ensure safety of the installation and compliance to electric regulations.
The solar PV panels must form part of a system that is connected to the mains distribution of the private residence.
The rebate applies to qualifying solar PV panels that are brought into use for the first time in the period from 1 March 2023 to 29 February 2024.
HOW CAN PEOPLE CLAIM THE INCENTIVE?
Individuals will be able to claim the rebate if they have:
• A VAT invoice that indicates the cost of the solar PV panels separately from other items, along with proof of payment.
• Certificate of Compliance evidencing that the solar PV panels were brought into use for the first time in the period from 1 March 2023 to 29 February 2024.
PAYE taxpayers will be able to claim the rebate on assessment during 2023/24 filing season. Provisional taxpayers will be able to claim the rebate against provisional and final payments.
WHAT ABOUT PEOPLE WHO RENT THEIR HOMES?
There is no ownership limitation for the incentive, so installations by landlords or renters would be eligible, but only the party that pays for the solar panels can claim the rebate.
WHAT ABOUT SECTIONAL TITLES / BODY CORPORATES?
If occupants are enabled to install their own panels, then the tax incentive applies as for all other individuals. A body corporate will not be able to claim this incentive. It is not clear whether many body corporates will be purchasing solar installations instead of using leasing or other options to avoid up-front costs for members. Government will be consulting on this aspect. If there is widespread interest in body corporates purchasing and installing solar panels, then payment (e.g special levies) for solar installations levied from the occupants would have to indicate the cost of the solar panels separately – as would be the case for any other claimant. The applicable Certificate of Compliance data would also have to be shared with SARS. Because there would be some adjustments to ensure that the right people could claim the right amounts, there will be consultation to determine the required approach and documentation.
Source: SARS
