At Inpower, we are dedicated to empowering business of all shapes and across a wide range of industries to adopt renewable energy solutions.
The South African government has expanded its renewable energy tax incentive to help stimulate private investment. The Clean Energy Tax Incentive, detailed in Sections 12B and 12BA of the Income Tax Act, provides significant financial benefits for companies investing in renewable energy infrastructure and is specifically designed to encourage businesses to embrace sustainable energy solutions.
Section 12B
Businesses can enjoy a substantial tax write-off for qualifying assets used in renewable energy production. This incentive allows you to spread your deductions over three years, enabling you to claim:
- 50% of the cost in the first year
- 30% in the second year
- 20% in the third year
For businesses investing in photovoltaic (PV) solar energy systems with a capacity under 1MW, the full cost can be deducted in the first year, offering immediate tax relief.
How it works: Investing R1 million in renewable solar energy can lead to a tax deduction of R500,000 in the first year, R300,000 in the second year and R200,000 in the third.
Section 12BA
This offers a temporary enhancement to the renewable energy tax incentive. For a limited period (from March 1, 2023, to March 1, 2025), businesses can claim a deduction of 125% for new and unused renewable energy assets put into service for the first time. This generous deduction provides an exceptional opportunity for businesses to maximise their tax benefits.
Maximise your savings today
Inpower is here to here to assist you with your energy needs while you take advantage of these tax incentives. By investing in renewable energy, you not only contribute to a sustainable future but also reap significant financial rewards, especially in the early stages of a project
By investing in renewable energy, you not only contribute to a sustainable future but also reap significant financial rewards, especially in the early stages of a project
Our team* is ready to support your transition to clean energy.
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Disclaimer: This is general information and does not constitute comprehensive tax, financial, legal or other advice. Inpower does not offer tax, accounting or legal advice. You should consult with your own professional advisors regarding your unique financial and tax circumstances.
