SARS Tax rebate benefits

The South African Revenue Service (SARS) is offering a tax rebate for individuals who install solar photovoltaic (PV) panels at their private residences between 1 March 2023 and 29 February 2024. The rebate is 25% of the cost of the solar PV panels, up to a maximum of R15 000 per individual.

To qualify for the rebate, individuals must meet the following requirements:

The solar PV panels must be new and unused.
The solar PV panels must have a minimum generation capacity of each being not less than 275W.
The solar PV panels must be installed at a private residence.
The individual must have a valid invoice for the solar PV panels, separately from other items.
The individual must have a Certificate of Compliance evidencing that the solar PV panels were brought into use for the first time in the period from 1 March 2023 to 29 February 2024.

Individuals can claim the rebate on their personal income tax return for the 2023/24 tax year. PAYE taxpayers will be able to claim the rebate on assessment during the 2023/24 filing season, while provisional taxpayers will be able to claim the rebate against provisional and final payments.

Here are some examples of how the solar tax rebate works:

Example 1: An individual purchases 10 solar PV panels at a cost of R40,000. They would be able to claim a rebate of 25% of the cost, up to R15,000, so R10,000.
Example 2: An individual purchases 20 solar PV panels at a cost of R4,000 per panel, for a total cost of R80,000. The calculation of 25% of R80,000 amounts to R20,000, but they can only claim R15,000 against their income tax liability for the 2023/24 tax year, as the deduction is limited to R15,000 per individual.

The solar tax rebate is a great incentive for individuals to invest in solar energy and reduce their reliance on the grid. It can also help to reduce the cost of installing solar PV panels, making them more affordable for everyone.