The government has introduced a R9 billion tax relief program to support South Africa’s move to cleaner energy, increase electricity supply, and ease the impact of high fuel prices. Finance Minister Enoch Godongwana unveiled the program during the 2023 Budget Speech, offering relief for households installing solar panels and companies investing in renewable energy. Additionally, there will be no increase in fuel levies, resulting in a tax foregone of R4 billion.
Godongwana emphasized the temporary expansion of the renewable energy tax incentive to encourage private investment and address the energy crisis. The expanded incentive allows businesses to claim a 125% deduction in the first year for all renewable energy projects, with no size thresholds, aiming to stimulate short-term investment.
To further boost electricity generation, the government proposes a rooftop solar incentive for individuals. Under this plan, individuals can receive a 25% tax rebate for the cost of new and unused solar PV panels installed at private residences. This rebate can offset personal income tax liability, providing a maximum benefit of R15,000 per individual for the 2023/24 tax year.
In line with these initiatives, changes to the Bounce Back Loan Guarantee Scheme are proposed to incentivize renewable energy and rooftop solar, addressing energy-related challenges faced by small and medium enterprises. The adjustments aim to humanize the approach, making it more accessible and beneficial for individuals and businesses investing in clean energy solutions.