Dr Rethabile Melamu, CEO of the South African Solar PV Industry Association (SAPVIA), made the following comments regarding the ‘solar panel incentive’ that was announced by the Finance Minister during yesterday's Budget Speech.
"Solar panels alone do not protect end users against load shedding”, she said. “The solar panel incentive is limited and does not address those households that can’t access instruments for the purchase of solar systems. At best those who install panels will only get up to R15 000 back from their taxable income,” she added.
The Minister had said that individuals who install rooftop solar panels from 1 March 2023 will be able to claim a rebate of 25% of the cost of the panels, up to a maximum of R15 000. This can be used to reduce their tax liability in the 2023/24 tax year. This incentive would be available for one year, the Minister added.
The Minister made this concession as a part of the government's admission that load shedding has caused irreparable harm to the economy and continues to undermine economic growth.
Dr Melamu says that based on a 25% cap, the offer of a R15 000 rebate would translate to a solar system of R60 000. While that could give households between 6 and 7 kW of power from solar PV panels, it would only be available while the sun was shining strongly onto the panels. As such, it would not make a meaningful impact on the average household which would want to store the power for later use. No incentive is being offered on storage batteries, however. She says that SAPVIA also wants more clarity since the rebate seems to incentivise people in higher tax brackets.
SAPVIA notes that an average household tends to purchase a 5 kW hybrid system, including panels and battery storage. Such equipment, including installation, costs between R95 000 and R200 000, depending on the components used, she added.
“It looks as if the incentives announced for business are better. Incentivising solar PV is a step in the right direction. However, we urge Government to consult with SAPVIA as industry experts to fine tune and improve the design of relief packages and financial instruments,” Melamu concluded.
