Finance Minister Enoch Godongwana has laid out a plan to lure businesses and individuals into investing in renewable energy.
Solar panels now come complete with tax incentives for businesses and individuals. Picture: Pixabay
JOHANNESBURG – In order to mitigate crippling load shedding, while simultaneously adhering to a low-carbon economy, tax incentives have been introduced to encourage renewable energy investment.
During his budget speech on Wednesday, Finance Minister Enoch Godongwana said the country had a role to play in adaptation and mitigation, in the form of two new tax measures.
From 1 March, businesses can reduce their taxable income by 125% by investing in renewables, with no thresholds on the size of the projects that qualify.
The incentive will be available for two years.
READ: READ IN FULL: Finance Minister Enoch Godongwana’s Budget 2023 speech
Renewable energy incentives come after President Cyril Ramaphosa’s announcement that new tax incentives will also be introduced for individuals to install rooftop solar panels – a measure that will see more households enjoy reliable energy supply while also reducing pressure on the national grid.
Individuals who install rooftop solar panels will be able to claim a tax rebate of 25% of the cost of the panels, up to a maximum of R15,000, from 1 March.
This incentive will allow households to reduce their tax liability in the 2023/24 year, and will be available for one year.
Solar-related loans will also be boosted for small and medium enterprises on a 20% first-loss basis, Godongwana said.
In addition, an “Energy Bounce-Back scheme” will be launched by National Treasury in April 2023.
