Eskom’s unofficial move to put South Africa on a semi-permanent loadshedding schedule, with promises of more worse to come, has forced many South Africans to consider the option of going off-grid by installing roof-top solar panels.
The only problem is, President Cyril Ramaphosa’s promise to help them do so, through tax incentives, has not materialized. In fact, his government appears to have developed cold feet and is now stalling on the issue.
According to ‘intervention 4’ contained in Ramaphosa’s Energy Response Plan, which he announced in July 2022, to speed up the rollout and reduce the cost of rooftop solar, national Treasury was tasked with considering the expansion of tax incentives for residential and commercial installations.
When the Minister of Finance, Enoch Godongwana, delivered his Medium Term Budget Policy Statement, the assumption was that he would announce these tax incentives but he failed to do so.
Not only this, when Ramaphosa’s ineffective National Energy Crisis Committee appeared before the joint committees of Energy and Public Enterprises in Parliament to report back on the implementation of the Energy Response Plan, they did not mention anything on progress made towards incentivizing rooftop solar installations.
While Ramaphosa’s Cabinet enjoy the benefits of uninterrupted power supply at Bryanston Estate, hardworking South Africa’s are being denied the opportunity to free themselves from Eskom’s loadshedding nightmare.
Incentivizing households and businesses to install rooftop solar will assist ordinary South Africans to mitigate the effects of loadshedding. While it will not solve the issue of rolling blackouts and huge gaps in generative capacity, it will provide some required domestic relief. It is therefore important that Ramaphosa’s government make clear its stance on these much needed incentives.
The DA has previously proposed an Emergency Solar Rebate (ESR) that would offer tax rebates for solar systems installed at residential properties. This Emergency Solar Rebate would be available for three years only, designed to alleviate our current energy crisis, and would work as follows:
100% tax deduction for the cost of installed solar equipment, up to a maximum of R75 000.
The purchaser would fund the cost of installation upfront, and would claim the cost against their taxable income at the time of submitting their ordinary annual returns.
This emergency initiative would cost R4 billion over 3 years, and remove 480 MW from the grid, with even a moderate take-up rate.
Ramaphosa rightly admitted that ‘There is significant potential for households and businesses to install rooftop solar and connect this power to the grid’. The only drawback is that he good at making promises but bad at fulfilling them.