Here’s how going solar will score households and businesses some tax relief

Businesses and households that install solar panels will be able to claim a 25% tax rebate of up to R15 000 from government.

Budget speech 2023

Finance Minister Enoch Godongwana on Wednesday said individuals who install rooftop solar panels from 1 March 2023 will be able to claim the 25% rebate of the cost of the panels, for a year.

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“This can be used to reduce their tax liability in the 2023/24 tax year. This incentive will be available for one year,” he said.

The minister made the announcement during his delivery of the 2023 budget speech in the National Assembly at the Cape Town City Hall.

President Cyril Ramaphosa during the State of the Nation Address, earlier this month, said the new tax incentive would reduce pressure on the national grid as the country faces a crippling energy crisis that Godongwana described as the “biggest economic constraint”.

Bounce-back loan scheme

The minister said changes to the bounce-back loan guarantee scheme – which gives additional funding to businesses to grow the economy and create jobs – are also proposed to incentivise renewable energy, rooftop solar, and address energy-related constraints experienced by small and medium sized enterprises (SMEs).

Godongwana said government will guarantee solar-related loans for SMEs on a 20% first-loss basis.

“National Treasury will launch the energy bounce-back scheme in April 2023,” he said.

Eskom’s debt of R254 billion

The finance minister also announced that government will take over Eskom’s debt of R254 billion to restore the struggling power utility’s financial viability.

Godongwana said government was taking on Eskom’s debt to ease pressure on the parastatal’s balance sheet and to enable it to invest in transmission and distribution infrastructure.

“It will also allow Eskom to conduct the maintenance required to improve the availability of electricity,” he said.

Godongwana added that R337 billion of Eskom’s debt was already government-guaranteed, and therefore, government’s debt relief will reduce fiscal risk and enhance long-term sustainability.

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