Government Support for Solar Energy

The South African government offers several incentives to encourage renewable energy adoption.

Section 12B Tax Incentive

Most significant incentive available:

• Benefit: 125% tax deduction on renewable energy investment
• Effective saving: 35-45% of total cost for high earners
• Eligibility: Solar systems generating >1MWh annually

Example Calculation

R150,000 solar system:
– Taxable deduction: R187,500 (125%)
– Tax saving (at 45% rate): R84,375
Net cost: R65,625

Municipal Incentives in Cape Town

• Small-scale embedded generation (SSEG): Feed electricity back to grid
• Net metering: Get credit for excess solar production
• Reduced connection fees for renewable energy

Bank Financing Programs

Major banks offering solar financing with special green loan rates.