Global Courant
Since load shedding is one of the problems of the country, most of the companies are affected by the load shedding and are looking for ways to reduce the damage caused by load shedding.
A tax incentive makes it easier for entrepreneurs looking to go solar.
in February 2023, section 12B tax incentive, in terms of corporations, individuals or trusts, taxpayers will be able to claim a 125% deduction in the first year for all renewable energy projects, with no generation capacity threshold, the minister of Finance announced this improvement.
However, according to reports, the adjusted premium will only be available for investments that come into operation for the first time between March 1, 2023 and February 28, 2025.
Rooftop solar is a good choice because of its minimal maintenance, most of the components are highly durable with a long service life, and energy costs decrease over time. With the enhanced Section 12B, tax incentives have encouraged investments such as Jaltech to raise retail capital from South African taxpayers specifically to fund solar energy projects in South Africa.
Jaltech partner Jonty Sacks said: “From the perspective of companies looking to raise capital for solar, Section 12B has now become very attractive as fund managers have raised capital and can offer rates much better than traditional financial institutions because we are not subject to are subject to the same rules as them.
“There is a whole new pool of capital available for solar installations, but it must be used before February next year or taxpayers will miss out on tax deductions within this fiscal year.”
Fund managers can offer financing to property owners or businesses at more competitive rates than traditional financing options.
“Traditional institutions can only fund part of a project, but as Section 12B fund managers are not covered by banking laws, we can fund an entire project. The conditions we offer are also more attractive,” says Sacks.
“Solar installers also benefit because they can now also access Section 12B financing for their customers or new and existing projects they operate. This has unlocked some projects that were simply taking too long through traditional funding channels.”
Sacks concluded: “Eskom is unlikely to supply the South African market with reliable electricity over the next two years. If it eventually achieves this, the cost of electricity will likely be significantly higher than the cost of generating energy from solar energy.”
Financing options for companies looking to go solar
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