South Africa Offers Tax Breaks to Counter Energy Crisis

South Africa is offering a total of 13 billion rand ($710 million) in tax incentives to businesses and individuals to encourage investment in renewable energy projects and offset the impact of higher fuel and food prices, Bloomberg News reported. Africa’s most industrialized economy is experiencing its worst bout of power rationing yet, with outages occurring for more than 200 days in 2022 and every day this year, because the state power utility can’t meet demand from its old and poorly maintained plants. The central bank estimates that the electricity crisis is costing the economy as much as 899 million rand a day. Individuals who install new solar photovoltaic panels at private residences in the year through February 2024 will be eligible for a tax rebate of 25% of the cost, up to a maximum of 15,000 rand, the National Treasury said in its Budget Review, released in Cape Town on Wednesday. An existing incentive for businesses that implement renewable energy projects will be expanded, enabling them to claim the equivalent of 125% of their investment as a deduction up front, it said. The incentives for business appear to be better than those offered to households, the South African Photovoltaic Industry Association said in a statement. The rebate apepars to benefit people who pay higher rates of tax “and won’t have a meaningful impact for most earners” without battery storage, the lobby group’s Chief Eexcutive Officer Rethabile Melamu said. Read more.