Our proposal for a tax deduction, of up to R75 000, to help you install a solar system at your home will alleviate pressure from the grid. This will help lower the load-shedding burden for other families and, importantly, lower the burden for businesses.
The DA’s proposed Emergency Solar Rebate (ESR) would be available for three years, designed to alleviate our current energy crisis, and would work as follows:
- 100% tax deduction for the cost of installed solar equipment, up to a maximum of R75 000.
- The purchaser would fund the cost of installation upfront, and would claim the cost against their taxable income at the time of submitting their ordinary annual returns.
Under our plan, citizens will be able to get a 100% tax reduction for the cost of installed equipment, regardless of their income or other taxes.
If, for example, you spend R7 000 on solar equipment, you are entitled to R7 000 back from SARS either in the form of a credit against any personal income tax you are due to pay or, in cases where you do not owe any personal income tax or you owe less in tax than the cost of your solar equipment, the difference should be paid out by SARS or credited against your income tax for the next year.
The cost of installing solar power has drastically decreased in the past few years. Whilst generating solar power may not be an option for all South Africans, it is quickly becoming an option for many citizens who are tired of load-shedding and the rising cost of electricity.
Solar power has now plummeted to below R1 per kWh (around 0.70/0.80 cents) while Eskom’s average domestic tariff has risen to R1.92 per kWh. In the long term, solar power is by far the cheapest source of electricity.
This emergency rebate initiative would cost R4 billion over three years, and remove 480 MW from the grid, with even a moderate take-up rate.
Given that we can save R35,1 billion just by stopping bailouts to failing SOEs, as well as save an extra R67,85 billion by selling off non-essential government assets, such as Sentech, and by cutting unnecessary funding to entities, such as the New Development Bank, this proposal is simple to fund with sufficient political will.