The South African Revenue Service (SARS) introduced a Solar Energy Tax Credit under Section 6C of the Income Tax Act to encourage individuals to invest in clean electricity generation by installing solar photovoltaic (PV) panels.

 

Below are the details of the incentive and its current status: Details of the Solar Energy Tax Credit (Section 6C)

  • Purpose: To incentivise households to invest in renewable energy, specifically solar PV panels, to supplement electricity supply and reduce reliance on the national grid.
  • Eligibility:
    • Applies to natural persons liable for personal income tax.
    • Covers new and unused solar PV panels with a minimum generation capacity of 275 watts per panel.
    • Panels must be installed and connected to the distribution board of a residence used mainly (more than 50%) for domestic purposes (e.g., not primarily for business use).
    • An electrical Certificate of Compliance (CoC) must be issued for the installation, per the Electrical Installation Regulations, 2009.
    • The taxpayer claiming the credit must have paid for the panels (either as a homeowner or renter; no ownership of the property is required).
  • Rebate Amount:
    • Individuals can claim a tax rebate of 25% of the cost of qualifying solar PV panels, up to a maximum of R15,000 per individual.
    • Only the cost of the solar PV panels qualifies; costs for inverters, batteries, supporting structures, installation, or other components are excluded.
    • Example: If 10 panels cost R40,000 (R4,000 each), the rebate is 25% of R40,000 = R10,000. If 20 panels cost R80,000, the rebate is capped at R15,000 (not R20,000).
  • Claim Process:
    • Taxpayers include the total cost of the PV panels in their Income Tax Return (ITR12) for the 2024 year of assessment.
    • Required documentation includes:
      • A VAT invoice clearly separating the cost of the solar PV panels from other items.
      • Proof of payment for the panels.
      • An electrical Certificate of Compliance (CoC) confirming the panels were brought into use between 1 March 2023 and 29 February 2024.
    • PAYE taxpayers claim the rebate during the 2023/24 filing season (starting 15 July 2024). Provisional taxpayers can claim against provisional or final tax payments.
  • Restrictions:
    • The rebate applies only to panels brought into use for the first time between 1 March 2023 and 29 February 2024.
    • Portable panels, diesel generators, inverters, batteries, and installation costs do not qualify.
    • If the panels are sold within one year of purchase (before 1 March 2025), SARS may reclaim the rebate, unless the sale is part of selling or vacating the residence.
    • The rebate cannot be claimed for panels used in business premises or for assets already deducted under other sections (e.g., Section 12B or 12BA).
  • Impact: The incentive was estimated to provide around R4 billion in tax relief for individuals, reducing upfront costs, grid dependence, and environmental impact.

Current Status of the Incentive

The Solar Energy Tax Credit under Section 6C was a temporary incentive available for one year only, from 1 March 2023 to 29 February 2024. As of the current date, August 19, 2025, this incentive is no longer active for new installations, as it was limited to panels brought into use within that specific period. Taxpayers who installed qualifying panels during the eligible period can still claim the rebate during the 2024 tax filing season, provided they meet all requirements and submit the necessary documentation. Additional Notes

  • Confusion with Other Incentives: This incentive (Section 6C) is distinct from the Section 12BA incentive for businesses, which allows a 125% deduction for renewable energy assets used in trade from 1 March 2023 to 28 February 2025, and the Section 12B capital allowance for businesses, which provides a 100% deduction for certain renewable energy assets.
  • Verification: SARS may require third-party returns from installers (due by 31 May 2024) to verify claims, including the taxpayer’s identity number and the date the panels were brought into use.
  • Recommendation: If you installed panels during the eligible period, ensure you have the required documents (VAT invoice, proof of payment, and CoC) and file your claim correctly. For future solar investments, check with SARS or a tax professional for any new or extended incentives, as no current replacement for Section 6C has been announced in the provided data.

For further details, refer to the SARS website (www.sars.gov.za) (www.sars.gov.za) or the Comprehensive Guide to the ITR12 Income Tax Return for Individuals and the Guide on the Solar Energy Tax Credit Provided under Section 6C.