Important Things to Consider Before Installing Solar
With the likelihood of prolonged power outages in South Africa, many homeowners are searching for solutions to mitigate the effects of load shedding. In response, the Finance Minister Enoch Godongwana announced in his budget speech that South Africans can receive up to R15,000 in tax rebates for solar panels starting from March 1st. This has led many individuals to consider solar energy as a means of obtaining an uninterrupted power supply.
The Tax Break Details:
- Eligibility: The rebate is available for individuals who pay personal income tax and can be claimed against their tax liability. It is not applicable to solar installations at business premises.
- Amount: The rebate is equal to 25% of the cost of new and unused solar photovoltaic (PV) panels, with a maximum limit of R15,000 per individual.
- Limitations: Only new and unused solar PV panels with a minimum capacity of 275W per panel (design output) qualify for the rebate. Other components of the system, such as batteries, inverters, fittings, or diesel generators, and installation costs do not qualify. Portable panels will also not qualify.
- Effective Period: The rebate applies to qualifying solar PV panels that are brought into use for the first time between March 1st, 2023, and February 29th, 2024.
- Claiming the Rebate: Individuals can claim the rebate by presenting a VAT invoice that indicates the cost of the solar PV panels separately from other items, proof of payment, and a Certificate of Compliance evidencing that the solar PV panels were brought into use during the effective period. PAYE taxpayers can claim the rebate during the 2023/24 filing season, while provisional taxpayers can claim the rebate against provisional and final payments.
While solar energy may seem like a cost-effective solution, Andrea Tucker, the director of MortgageMe, cautions that it may not necessarily be easily affordable. She advises prospective buyers to assess their energy needs, research financing options, and have a budget in mind before making a purchase. Banks and finance groups view solar as an excellent investment, provided it is installed professionally, compliant with regulations, and adequate for the home’s needs. Based on the homeowner’s budget and finances, banks typically offer several financing options, including adding the cost of solar to a home loan, extending the home loan to cover the installation cost, or financing solar through rent-to-buy or subscription options.
Ross Mains-Sheard, the co-founder and CEO of Versofy Solar, suggests that prospective buyers should talk to friends, neighbors, and their community for recommendations, assess their home’s energy needs and capacity to support solar panels, and shop around for multiple quotes before deciding to go solar. He also recommends getting the necessary approvals, ensuring the installer is accredited and uses quality materials, and regularly maintaining and insuring the solar system. Mains-Sheard notes that the storage capacity of the captured solar energy should also be considered based on the size of the home and appliances that people wish to keep on during a power outage. He added that there may be the possibility of selling surplus energy back into the grid in the future, which could provide a modest return on investment.