It pays to go green. The National Treasury has revised Section 12B of the Income Tax Act No. 58 of 1962 to encourage the use of renewable energy.
According to this Act, all photovoltaic (PV) assets such as PV solar panels that do not exceed 1 megawatt (MW), qualify for a 100% deduction of the cost of the asset if the asset was brought into use on or after January 2016. More specifically, it allows for a deduction of 50%, 30% and 20% each year for a period of three years. This is applicable for any machinery, plant, implement, utensil or article owned by the taxpayer.
The qualifying asset has to be brought into use for the purpose of the taxpayer’s trade in order to generate electricity from the following renewable energy sources:
– Wind power
– Solar energy
Finance charges are not included. Improvements to these assets as well as any foundation or supporting structure are subject to the allowance. The deduction is valid whether the asset is bought cash or through an instalment credit agreement.
Unfortunately, very few people are aware of this cost-effective Act. Should you qualify, that means that your renewable energy source will have paid for itself and gone on to save you money because of the reduction in electricity costs.
Ellies has a wide selection of renewable energy products to help you tap into this very advantageous and eco-friendly sector.