Clean Energy Tax Incentive Businesses

Updated September 2026. The rules changed twice in the last two years. Here is what still applies, what has ended, and what it means for a business installing solar now.

Section 12B – still available, and still generous

If your business, trust or sole proprietorship installs a solar PV system and uses it to generate electricity for its trade, Section 12B of the Income Tax Act lets you deduct 100% of the cost in the first year the system is brought into use.

• Applies to solar PV systems up to 1 MW.
• Covers the direct cost of the panels, inverters, batteries, mounting, installation and the supporting structures.
• The asset must be owned by the taxpayer, or acquired under an instalment credit agreement. (A pure rental usually does not qualify for the lessee – ask us about structuring rent-to-own correctly.)
• There is no pro-rating: a system switched on in the last month of your financial year still gets the full deduction in that year.
• Systems above 1 MW use the 50% / 30% / 20% write-off over three years.

Worked example: a company on the 27% tax rate installs a R400,000 system. The full R400,000 is deducted in year one, reducing tax payable by roughly R108,000. Combined with lower electricity bills and feed-in credits, the effective payback drops from about five years to under four.

What has ended

• Section 12BA (125% deduction): only for systems brought into use between 1 March 2023 and 28 February 2025. Not renewed in the 2025 Budget.
• Section 6C home solar rebate (25%, max R15,000): only for panels installed between 1 March 2023 and 29 February 2024.

There is currently no residential solar tax rebate. For homeowners the financial case is made by the City’s feed-in tariff and rising tariffs instead – see Cash for Power.

Section 12L – energy-efficiency savings allowance

Separate from 12B, Section 12L rewards businesses that use less energy, at 95 cents per kilowatt-hour (or equivalent) of verified savings over a 12-month period. It has been extended to years of assessment ending before 1 January 2031. The savings must be independently measured and verified against a baseline, so it suits factories, cold stores and large commercial buildings replacing old equipment (heat pumps, efficient air-conditioning, LED lighting, variable-speed drives). Try our SARS 12L calculator.

How First Energy helps

• We supply an itemised invoice that separates qualifying assets, installation and structures so your accountant can claim cleanly.
• We confirm the commissioning date in writing (the date the system is “brought into use”).
• For rent-to-own clients we structure the agreement so ownership transfers correctly.
• For 12L we can quote a metering and verification partner alongside the equipment.

This page is general information, not tax advice. Confirm your position with your accountant or a tax practitioner before relying on any deduction.