A tax rebate on solar panels, introduced in the 2024 tax year but then removed, should not have been scrapped and, indeed, should be reintroduced and expanded.
This is the view of Andrew Middleton, CEO of GoSolr, a solar installation company that on Tuesday published its latest quarterly update, the third it’s produced, on the solar industry in South Africa.
The solar rebate – which was only for solar panels – should “absolutely have been extended”, Middleton told TechCentral. Not only that, but if South Africa is serious about mitigating the effects of climate change and solving the energy supply crisis, it should expand the programme to include inverters and batteries, which are also required in most solar projects, he said.
The rebate on solar panels – 25% of the cost, up to a maximum of R15 000 – was “really limited”. To get the full rebate, consumers had to have a very large solar installation of at least three times the average project size.
Despite the limited scope of the rebate – and even though Middleton believes it should have included “the entire stack of components” used in home solar installations – he is “disappointed” government ended it.
Worse, the rebate was replaced with an import tariff on solar panels designed to encourage the local manufacture of the panels.
“Yes, there is a local industry [making panels], but it’s very uncompetitive and nowhere near the pricing you can get from imports,” Middleton said.
Going solar
As a result, the increased prices of imported panels have simply driven up the cost of going solar for homeowners. Government is effectively penalising people for choosing to go solar, he said. And even though Eskom hasn’t imposed load shedding since March, it continues to burn expensive diesel (albeit at a slower rate than a year ago) in its open-cycle gas turbines to keep the lights on, especially during during peak demand hours.
Middleton said the solar installation industry is on track for its second-best year ever, although it will still be sharply down from 2023’s bumper year when load shedding was at its peak.
Read: Homeowners are still going solar – but for different reasons
Citing figures from Eskom, GoSolr said in its latest quarterly report that 749MW of rooftop solar capacity has been installed this year, taking the total to 5.9GW. Some 162MW of new rooftop solar was added in the third quarter, down 267MW from the same three months in 2023. – © 2024 NewsCentral Media
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