What You Need To Know About The Solar Panel Tax Incentives For Private Residences

The recently announced solar panel incentive programme by Enoch Godongwana, Minister of Finance, will allow tax-paying South Africans to claim rebates on their solar panels in the coming financial year. We take a look at what you need to know. 

The rebate is 25% of the cost of new and unused solar photovoltaic (PV) panels, up to a maximum of R15 000 per individual.

There is a catch - The solar PV panels must be new, unused, and have a minimum capacity of 275W per panel, and must be installed at a residence that is mainly used for domestic purposes. Other components of the system, such as batteries, inverters, and installation costs, do not qualify for the rebate. The incentive is only available for solar PV panels brought into use for the first time from 1 March 2023 to 29 February 2024. Both renters and landlords are eligible, but only the party that pays for the solar panels can claim the rebate. Body corporates will not be able to claim the incentive.

It is also important to note that home owners will not have to repay Sars in the event that they sell their home with solar installation. However, if the panels themselves are sold within one year of purchase, a claw-back of the rebate will apply.

PAYE taxpayers can claim the rebate on assessment during 2023/24 filing season, while provisional taxpayers can claim the tax break against provisional and final payments.

They will need to supply the following documents alongside their claim:

• A VAT invoice that indicates the cost of the solar PV panels separately from other items, along with proof of payment.
• Certificate of Compliance evidencing that the solar PV panels were brought into use for the first time between 1 March 2023 and 29 February 2024.