Solar Power Incentives & Tax Rebates for Consumers in South Africa

After years of weathering the (seemingly endless) storm of discontent about load-shedding and Eskom’s ever-worsening capacity to provide reliable electricity, the ANC made some waves in early 2023 by making two significant announcements claiming to address the situation.

One was President Cyril Ramaphosa announcing the creation of a new cabinet position and appointing Dr. Kgosientsho Ramokgopa as the newly minted Minister of Electricity. The office was created with the express purpose of addressing South Africa’s dependence on Eskom and the failure of existing infrastructure to meet the country’s demand for electricity.

The second was offering the first-ever national Solar Tax Incentive for Individuals and substantially expanding tax and other benefits for businesses.

What can the new solar power incentives and tax rebates do for you if you’re sick of planning your life around load-shedding and dealing with unexpected blackouts?  

Check out the answers below.

What Are the Tax Incentives for Switching to Solar in South Africa?

Despite the ongoing energy crisis in South Africa, the federal government has lagged far behind the rest of the world in implementing incentives for switching to clean, renewable energy sources like solar power.

Recognising the need to eliminate our dependence on fossil fuels and achieve net-zero carbon emissions to prevent a global climate catastrophe, countries like the US have moved aggressively to incentivise the adoption of residential and commercial solar energy. 

Until recently, the ANC made no similar attempts to encourage individuals and businesses to switch to solar and reduce their reliance on Eskom — despite the worsening energy shortage and load-shedding crisis.

However, that changed in February 2023 when Finance Minister Enoch Godongwana announced tax credits for individuals and businesses who install rooftop solar panels to “reduce pressure on the grid and help reduce load-shedding.”

Premier Alan Winde of the Western Cape cautiously welcomed the incentives but said, “The tax incentive for individuals does not go far enough. We must demonstrate a definitive commitment to renewable energy. The lack of a clear plan to achieve long-term energy resilience remains a deep concern for us.”

So, what exactly are the tax incentives for individuals and businesses that install rooftop solar panels?

And how do you receive them?

Read on to find out more. 

Solar Tax Incentives for Individuals

Unfortunately, the tax incentive for individuals who install rooftop solar panels contained in Budget 2023 is relatively modest. 

However, any government incentive that offsets your initial investment and reduces your solar payback period should be welcomed. 

Here’s what you need to know about the Solar Panel Tax Incentive For Individuals

How Do Individuals Receive Solar Tax Rebates?

  • Only individuals who pay personal income tax are eligible
  • Both homeowners and renters (whoever paid for the solar panels) can qualify
  • The credit can be claimed against income tax liability
  • A VAT invoice and proof of payment for the solar panels alone (no additional purchases) must be provided
  • Individuals must also provide a Certificate of Compliance proving the solar panels were purchased or “brought into the use for the first time” between March 1, 2023 and February 29, 2024
  • If you’re a PAYE taxpayer, you can claim the rebate during the 2023/2024 filing season
  • If you’re a provisional taxpayer, you can make a claim against provisional and final tax payments
  • The credit is only available for one year: between March 1, 2023 and February 29, 2024

How Much Solar Tax Credit Can You Claim?

Individuals can claim a rebate of up to 25% against the total cost of new or unused rooftop solar panels, up to a maximum of R15,000 per person.

For example, if you bought two EcoFlow 400W rigid solar panels at the current retail price of R10,999, 100% of the cost of PV panels can be claimed against your income tax liability.

If you bought four of the same panels at the same price for a total of R21,998, you would only be eligible to claim a tax incentive of R15,000. The remaining balance of R6,998 would be ineligible for further income tax credit and your sole responsibility as the purchaser. 

In addition to the recent Solar Panel Tax Incentive, the cost of installing your solar power system may also be tax deductible under Section 12B of the Income Tax Act of 2016


What Type of Equipment Is Eligible for the Solar Panel Tax Incentive For Individuals 

  • Only new or unused rooftop solar panels are covered by the credit. Portable power stations or balance of system components (like an inverter, solar battery, or charge controller) are not eligible for the incentive. However, solar panels don’t work without these essential components.
  • Solar panels must have a minimum rated power capacity of 275W per panel, and portable solar panels do not qualify (regardless of rated power wattage).
  • The solar panels must be installed at a residence.
  • The installer must provide a Certificate of Compliance.
  • The portable power station — such as EcoFlow’s DELTA Pro — or other balance of system must be directly connected to the home’s mains distribution. Solar panels that are part of standalone systems are not eligible. Integration with your home’s existing wiring can be achieved with a transfer switch or Smart Home Panel.     

Local Solar Incentives for Individuals

Depending on what part of South Africa you live in, the federal Solar Panel Tax Incentive may not be the only government program that can help defray the cost of switching to solar.

(Source: Energize Magazine)

In the Western Cape, for example, “most municipalities” allow you to sell any electricity you generate in excess of what you consume back to the utility grid in exchange for credit against your bill. This process is called net metering or net billing, and it’s achieved by connecting your solar power system to the electricity meter in your home.

Staying in the Western Cape, if you happen to live in the capital city of Cape Town, there are even more incentives for individuals and businesses to switch to solar. 

According to Mayor Geordin Hill-Lewis: “To make going solar even more attractive, the city is raising the residential, small-scale embedded generation tariff by 10,15% for 2023/24, plus a 25c per kWh incentive. The city is also significantly reducing the monthly AMI meter Administration fee in 2023/24.”

Cape Town’s commitment to reducing electricity dependence on Eskom by encouraging a switch to solar is paying off. Applications for residential solar power system installations are smashing records, and the city is pursuing an “R1.2 billion solar PV and battery storage project, which should shield it from one full stage of load shedding.”    

Cape Town and the Western Cape are definitely leading the way in reducing South Africa’s dependence on Eskom, but new provincial solar incentives appear to be underway.

Whether you live in KZN, the Eastern Cape, or anywhere else in SA, always do your research on any new incentives that might make your solar switch less costly.   

Energy Bounce‐Back Loan Guarantee Scheme (EBB) for Individuals

Primarily targeted at businesses, the Energy Bounce‐Back Loan Guarantee Scheme (EBB) is also available to individuals and homeowners who qualify for the eligibility requirements of a participating lender. 

If you want more EBB background, skip to the business section below. 

For individuals, the most crucial things to note are:

  • Individuals who meet the standard lending requirements of major banks like ABSA, FNB, and Standard should be eligible for an EBB loan.
  • Unlike the solar tax incentive, all rooftop solar power system components are eligible — not just PV panels — including the solar generator or other essential balance of system components like an inverter or solar battery.
  •  The South African Reserve Bank (SARB) guarantees 20% of qualified loans on a first-loss basis, incentivising lenders
  • Interest rates are capped at “an interest rate of no more than the repo rate plus 6%.”
  • The maximum available guaranteed loan amount is R300 000 for households 

Solar Tax Incentives for Businesses

Budget 2023 is considerably more generous to businesses looking to transition to solar power for electricity generation.

Not only did the budget extend existing tax incentives for switching to renewable energy sources — some of which date back to 2004, it announced an “enhanced renewable energy tax incentive” that applies to the following fossil fuel and nuclear fission methods of electricity generation:

  • Photovoltaic solar energy
  • Concentrated solar energy
  • Wind Power
  • Hydropower to produce electricity
  • Biomass compromising organic wastes, landfill gas, or plant material 

Unlike the incentive for individuals, every component of large commercial solar power systems — not just new solar panels — is eligible for a rebate of “125% of the cost of all eligible assets.” 

For context, if a large business spent R10 million on a high-capacity PV solar power system for electricity generation, it could be eligible for R12.5 million in tax rebates on every component — not just the solar panels.

The window for business solar tax incentives is two years — from March 1, 2023, to March 1, 2025 

In addition, Budget 2023 extends the Covid-driven Bounce Back Loan Guarantee Scheme to cover investments in solar power systems. The program is designed to “facilitate working capital loans for those businesses that supply rooftop solar to meet increased demand.”  The South African Reserve Bank (SARB) is working with participating banks to provide qualifying businesses (and households) guaranteed access to loans “at an interest rate of no more than the repo rate plus 6%.” 

So far, major banks like ABSA, FNB, and Standard are participating in the Energy Bounce‐back Loan Guarantee Scheme (EBB).

However, many small (and enterprise) businesses may be out of luck for both the tax rebate and loan programs. Here are some of the eligibility requirements:

  • Must be registered with the Companies and Intellectual Property Commission and/or VAT (eliminating many sole traders and informal small businesses)
  • Must have an annual turnover under R300M (eliminating enterprise-level companies)
  • Maximum loan amount of R10 million   

Frequently Asked Questions

Are Solar Panels Tax Deductible for SARS?

The South African Revenue Service (SARS) is the autonomous agency responsible for collecting income and other taxes from individuals and businesses. As the Solar Panel Tax Incentive is payable as a credit against tax liabilities, you can consider eligible solar panel purchases as deductible from SARS.

What Happens To Your Solar Tax Credit If You Sell Your Solar Panels or Home?

SARS will not penalise you if you sell your solar panels as part of your home. The primary goal of the Solar Panel Tax Incentive is to relieve pressure on the grid. Presumably, the new owner will continue to use the PV panels to power the home. However, if you sell JUST the PV panels within one year of installation, SARS will claw back any tax benefits.

Final Thoughts

The initial announcement of the Solar Tax Incentive for Individuals was met with enthusiasm. 

But the excitement quickly wore off once many observers like tax experts and journalists read the fine print.

After all, R15,000 worth of tax credits for solar panels alone isn’t going to pay for any household to go off-grid completely. 

But it’s a start — and it can put you on the road to energy independence from Eskom and load-shedding.

The potential benefits for businesses are much more substantial — which makes sense given the ANC’s stated goal of increasing overall off-grid electricity generation capacity.

Regardless of federal incentives, the benefits of switching to solar power are enormous. 

If you opt for an off-grid electricity solution from EcoFlow, you can generate electricity with solar panels AND charge your portable power station’s battery with household electricity during non-load shedding hours.

Say goodbye to the nightmare of load-shedding forever with a whole home backup power solution that you can charge with solar panels.

EcoFlow is a portable power and renewable energy solutions company. Since its founding in 2017, EcoFlow has provided peace-of-mind power to customers in over 85 markets through its DELTA and RIVER product lines of portable power stations and eco-friendly accessories.


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