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New Tax Incentive for Solar Panel Installation

New Tax Incentive for Solar Panel Installation

Hans Hillermann and Amé Smith

Individuals who install solar panels between 1 March 2023 and 29 April 2024, can claim a 25% rebate on the cost of new or unused solar panels – up to a maximum rebate of R15,000.

To maximize your tax incentive, you will need to invest in solar panels worth R60,000. It is also important to note that the rebate only applies to the cost of the solar panels and does not cover installation or other related expenses.

To be eligible for the rebate, the solar panels must meet the following criteria:

  1. They must be new and unused, either as part of a new system or an extension of an existing system.

  2. Each panel must have a minimum capacity of 275W.

  3. They must be installed at a domestic residence and connected to the main distribution of the private residence.

  4. They must have a certificate of compliance in accordance with the Electrical Installation Regulations of 2009 to ensure safety and compliance.

It is important to highlight that the tax rebate applies to homeowners who rent out their homes or to tenants residing in the property. However, it is crucial to note that only the party responsible for the payment of the solar panels can claim the rebate. Additionally, the incentive extends to sectional title homes, provided that the individuals personally funded the solar panels rather than the body corporate.

To claim the rebate, individuals will need to provide the following information during the 2023/2024 filing season:

  1. A valid VAT invoice that clearly indicates the cost of the solar panels, separate from other expenses such as installation fees.

  2. Proof of payment for the invoice.

  3. Certificate of Compliance as evidence that the solar panels were brought into use for the first time between 1 March 2023 and 29 February 2024.

If the home is sold after the installation of the solar panels, there will be no recoupment payment to SARS as the panels are typically fixed to the house.  However, if the panels themselves are sold within one year of being brought into use, there will be a clawback of the rebate.

In conclusion, the new tax incentive for solar panel installation offers a valuable opportunity for individuals to generate clean electricity and decrease their reliance on the grid.  By taking advantage of the rebate, individuals can not only save money but also contribute to a more sustainable future.

For more information, please get in touch with your local Moore Firm.