Businessinsider.co.za | How to get R15,000 worth of free solar panels via SA's new tax break – if you can get R60,000 fast

• The government will give you back R15,000 of your own money if you install solar panels – soon.
• Finance minister Enoch Godongwana announced the self-generation electricity tax break in his annual budget on Wednesday.
• The system is pretty straightforward, but you need more than R60,000 within a year to get the maximum benefit.
• Here's how South Africa's new solar-panel tax incentive will work.
• For more stories, go to www.BusinessInsider.co.za.

The government would like you to install some solar panels please, and is willing to give you R15,000 if you do that – albeit by giving you back some of your own money.

Also, to claim that full amount, you'll need well over R60,000.

But other than that, the solar tax incentive finance minister Enoch Godongwana announced in his annual budget speech on Wednesday is pretty straightforward. As long as you can find someone to sell you already scarce solar panels, and get them installed, and can wait until mid-2024 to get your money back.

Here is how claiming South Africa's new tax break for installing solar panels will work.

You'll need more than R60,000 to get back R15,000, and that is as good as it gets.

The incentive is capped in two ways: at a maximum of R15,000 and at a maximum of 25% of what you spend. So to make the most of it, you'll need to spend R60,000.

If you hit the level of R200,000 to R300,000 that could conceivably get you off the grid entirely, you can still only claim R15,000. But that's not really the idea; the government would rather see a lot of people installing a lot of panels to lower their reliance on the grid just a little bit than to help fund a bunch of rich people to bail on it entirely.

If you actually want to use your panels, you'll need rather a lot more than R60,000, though. 

The tax break is only on solar photovoltaic (PV) panels – absolutely nothing else. A supplier could probably fold a delivery fee into the price, but you can't claim against installation, or batteries, or wiring, or anything else needed to make those panels, you know, work.

The rule of thumb is that panels come in at anywhere between 25% and 40% of the total cost of a rooftop electricity system. 

You will need that money soon...

Electricity supply is now a national disaster, and you'll be expected to get a move on.

"The incentive will only be available for 1 year to encourage investment as soon as possible," says the national treasury.

There is every chance the deadline will be extended if electricity supply remains tight this time next year – but no guarantee.

To be clear, you can't just place an order, or even take delivery of your solar panels. To qualify for the rebate, your system must be "brought into use" by no later than the next leap day, 29 February 2024.

... and you had better come with cash.

Suppliers and installers were already stretched by demand, with lead times running into several months.

We couldn't find a lot of them to speak to on Wednesday, because they were frantically gearing up to meet what they rightly anticipate to be a significant leap in demand.

Everything suggests those suppliers and installers will be able to demand full payment on order – because if you don't have the cash to pay right away, they can find another customer who does.

You can't DIY it, or just get the panels attached to your roof and do the rest later.

The rebate requires paperwork, specifically a certificate of compliance with the Electrical Installation Regulations. That means a qualified installer.

Nor can you cut corners by, say, just running a wire down to a small portable inverter system. The panels "must form part of a system that is connected to the mains distribution".

And don't bother with portable panels, or tiny ones.

There are a couple of pre-requisites for the panels. They must be:

• New, "to ensure that the capacity is in addition to what the country already has in place". You can extend a current system, but the panels you install must never have been used.
• Screwed down. Nothing portable, and you don't get the tax break until they are installed.
• Be rated for an output (design) capacity of at least 275W, which are the physical size most people will thin of when you talk about home solar panels.

Businesses need not apply

Panels that get the rebate must be installed at "a residence that is mainly used by an individual for domestic purposes".

Keep in mind that is something the SA Revenue Service can easily cross-check against several databases.

Godongwana promised an April launch for am "Energy Bounce Back Scheme", commercial loans for small businesses to install rooftop solar, with the government guaranteeing part of the loan.

When you get your money depends on how you pay tax

The deal is only valid on personal income tax; you can claim the rebate against your tax liability. In other words, if you end up owing SARS money in the final analysis, what you owe will be reduced by the 25% of the cost of your panels, up to R15,000. If you pay exactly the right amount of tax throughout the year, you'll have a R15,000 credit with SARS, which will be paid to you just like any tax refund.

For pay-as-you-earn (PAYE) taxpayers, where tax is deducted from wages every month, that refund will fall under the 2023/2024 filing season. Filing for that typically opens in July – but even if the legislation were to pass in time, you can't claim the rebate against last year's tax. So your first chance to claim it will be July 2024.

For provisional taxpayers, the claim can be made against either their provisional or final payments, says the treasury.