More and more South Africans are turning to solar power to combat the country’s ongoing energy crisis, and the government has taken note. One reaction has been the introduction of a new tax incentive, which the Minister of Finance announced back in 2023 during the Budget Speech. Presumably this is to encourage residential solar installations, and to this end, we all have the opportunity to take advantage of a solar tax rebate this tax season.  

Simply, this tax credit is intended to enable individual taxpayers to claim back a portion of the costs they outlaid to install new solar photovoltaic (PV) panels. Considering that solar panels can be pretty expensive, it’s wonderful to hear that you could claim tax back. For some, this solar tax rebate could form a vital component of their financial recovery.  

If you’re eager to understand how this works, check if you qualify, and make sure that you don’t miss the deadline, then take a few minutes to explore this guide. We’ve broken down what this rebate is, how to know if you can claim, and how to claim during this filing season. 

The Deadline Line 

It’s really important to keep in mind that the solar energy tax credit is, at this point, only available for one year. The filing season started 15 July 2024, so time is running short. Keep reading to check if you qualify and how to get your rebate. 

Do You Qualify For The Solar Tax Rebate? 

Having reviewed the information published by the South African Revenue Service (SARS), it has been revealed that the solar tax rebate is available to any individual who pays personal income tax and installs new and unused solar PV panels at their primary residence.  

Here’s a recap: 

• Any individual who pays personal income taxes. 
• The panels that you installed were new and unused. 
• The panels were installed at your primary residence. 
• The panels must be PV, have a minimum capacity of 275 watts and be connected to your home’s electrical distribution board.  

How Much Can Be Claimed 

Understandably, the top question on everyone lips is how much you can get back. Well, the solar tax rebate allows individuals to claim back 25% of the cost of their solar PV panels, however there is a maximum limit. This maximum comes to R15,000 per taxpayer.  

Let’s say that, for example, you have purchased 10 solar panels at R4,000 each. Your total would come to R40,000, meaning that you could claim a rebate of R10,000. That’s 25% of R40,000, capped at the R15,000 limit.  

A Step By Step Guide 

You can claim your solar tax rebate when you file your annual personal income tax return (ITR12). What will happen is that SARS will calculate the rebate amount based on the information you provide, so you don’t need to do the calculation yourself. You will, however, need to make sure that you have provided all the relevant and accurate information to SARS. 

We can help you with an idea of the documents that you should get ready in order to submit to SARS. 

To claim the solar tax rebate, you’ll need to provide: 

• A COC (Electrical Certificate of Compliance) for the solar installation, issued by a qualified electrician.  
• Proof of payment and any relevant invoices associated with the purchase of the solar PV panels.  
• Documentation proving that the panels were installed and first used, so if you’re taking advantage of this rebate in 2024, you’ll need to provide evidence dated from March 1, 2023 to February 29, 2024.  
• Documentation showing the panels are installed at your primary residence used mainly for domestic purposes. 

Be Aware Of Limitations And Exclusions 

Before you get too excited about the prospect of receiving a few thousand Rands back, make sure you have taken note that the solar tax rebate only applies to the cost of the solar PV panels themselves. This does not include other components, like your inverters or batteries.  

Additionally, as already mentioned, the rebate is only available for one year, from March 1, 2023 to February 29, 2024.  

Feeling Informed? 

Clearly the solar energy tax credit provides a valuable opportunity for South African homeowners to offset some of the costs of transitioning to renewable energy. By understanding the eligibility requirements and documents needed, you will be in a confident position to maximize your savings. 

Don’t forget that AA Inform can assist you with all sorts of information. Whether you need practical advice on how to reduce your debt or figure out what the right choice about your solar requirements is, or you simply need a Personal Loans Calculator to work out if a loan is right for you, we are here.