Godongwana urged to extend tax incentives for solar panels

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Experts in the renewable energy sector have called on the Minister of Finance, Enoch Godongwana to consider extending tax incentives for individuals who install roof top solar panels. In his speech in 2023 Godongwana announced tax rebates for individuals and businesses in an effort to reduce pressure on the grid and ease load shedding.

Those who took advantage of this offer were able to claim a 25 % rebate to the cost of their solar panels installed with the threshold at R15 000. The offer for individual households ends this month. The Finance Minister is expected to deliver his budget speech on Wednesday.

“From the 1st of March 2023 business will be able to reduce their taxable income by 125 % of the cost of investment and renewables. There will be no threshold on the site of the project that qualifies. An incentive will be available for two years to stimulate investment in the short term,” Godongwana said.

An announcement by the Minister of Finance that households would receive a tax rebate of 25 % during rooftop solar installations was welcome by many South Africans. Godongwana also announced reduction of taxable income for businesses.

The aim according to the minister was to encourage business and individuals to invest in renewable energy to increase electricity generation. It is still not clear whether the incentive had an impact that government was hoping for but many believe the move was necessary as the energy crisis was a threat to an already dwindling economy and social order.

During his 2023 address, Minister Godongwana alluded to the fact that green technologies were becoming cheaper. The energy expert says the government should consider long term goals if it aims to deal with energy crisis.

“I do believe that if you can extend this rebate that the innovation of those products can develop and the competitiveness of those products can develop,” says Nato Oosthuizen, renewable expert.

Oosthuizen says he hopes the minister takes consideration the economic ripple effects by extending the tax incentive to give the industry time to expand its market.

“I would also like to see the mentioning that they see renewable energy as a strategic pillar of economy growing forward and something that South Africa can sell,” Oosthuizen added.

The recent Africa Solar Industry Association report, 2023 was the best year for solar globally.

Africa recorded more than 3.7GW of solar installations coming online.

Source: SABC News (sabcnews.com)