Offers incentives for investment in renewable-energy projects
23 Feb 2023
On 22 February 2023, The Minister of Finance of South Africa delivered the annual Budget Speech. The 2023 Budget includes tax incentives to support businesses and households who invest in renewable energy, including rooftop solar, in a bid to offset the impact of intensifying power cuts. The Minister announced that the tax incentives available for businesses to promote renewable energy would be temporarily expanded.
Businesses are currently able to deduct 50 per cent of the costs in the first year, 30 per cent in the second and 20 per cent in the third for qualifying investments in wind, concentrated solar, hydropower below 30 MW, biomass and photovoltaic (PV) projects above 1 MW. Investors in PV projects below 1 MW are able to deduct 100% of the cost in the first year. Under the expanded incentive scheme, businesses will be able to claim a 125 per cent deduction in the first year for all renewable-energy projects with no thresholds on generation capacity.
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Type:
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Promotion and facilitation (Investment incentives)
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Industry:
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Not industry specific (SDG)
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Services (Electricity, gas, steam and air conditioning supply)
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Sources:
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National Treasury Website, 2023 Budget, https://www.treasury.gov.za/documents/National%20Budget/2023/speech/speech.pdf, 22 Feb 2023
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Torchlight, South Africa – Tax incentives for renewable energy projects in 2023 budget will moderately boost investment in power sector in next year, https://www.torchlight.ai/full-report-south-africa-tax-incentives-for-renewable-energy-projects-in-2023/, 01 Mar 2023
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Engineeringnews, Govt aims to stimulate renewables investment with R9bn in tax incentives, reworked bounce-back scheme, https://www.engineeringnews.co.za/article/govt-aims-to-stimulate-renewables-investment-with-r9bn-in-tax-incentives-reworked-bounce-back-scheme-2023-02-22, 22 Feb 2023
