How to Claim Tax Deductions on Solar Energy Systems in South Africa

How to Claim Tax Deductions on Solar Energy Systems in South Africa

Investing in solar energy isn’t just about reducing your electricity bill — it’s a strategic financial move. South African taxpayers can claim substantial tax deductions under Section 12B of the Income Tax Act when installing qualifying solar photovoltaic (PV) systems.

At Haultron Energy, we specialize in delivering turnkey solar solutions that meet both technical and tax compliance standards. As a premiere EPC (Engineering, Procurement, and Construction) firm, we guide clients from concept to commissioning, ensuring every system is optimized for performance and financial return.

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What Is Section 12B?

Section 12B allows businesses and individuals to deduct the cost of qualifying solar PV assets used in electricity generation. This includes:

  • Solar Panels

  • Inverters

  • ground mount solar structure

    Mounting structures

  • Cabling

  • Batteries

    If part of the generation system.

Note: Section 12BA, which offered a 125% enhanced deduction, expired on 1 March 2025 and is no longer applicable.

Who Qualifies?

To claim the deduction, your solar PV system must:

  • Be new and unused
  • Be owned or acquired via instalment credit agreement
  • Be used for trade (i.e., business or income-generating activity)
  • Be used in generating electricity — not just heat (e.g., solar geysers do not qualify)

Deduction Structure: How Much Can You Claim?

Section 12B offers two deduction paths depending on the size of your solar PV system:

  • Solar PV Systems ≤ 1 MW

    • 100% deduction in the first year

    Example: R500,000 system → R500,000 deductible in Year 1

  • Solar PV Systems > 1 MW

    • 3-year split:
      - Year 1: 50%
      - Year 2: 30%
      - Year 3: 20%

    Example: R2,000,000 system
    - Year 1: R1,000,000
    - Year 2: R600,000
    - Year 3: R400,000

Also Deductible

Section 12B also allows deductions for:

  • Foundations
  • Mounting frames
  • Structural supports
  • Improvements directly tied to the solar PV system

These costs must be incurred as part of the installation and used in the generation of electricity.

How to Claim Your Deduction

  • Ensure your system meets Section 12B requirements


  • Keep records: invoices, contracts, commissioning certificates

  • Consult your tax advisor or accountant

  • Declare the deduction in your annual tax submission

Why Choose Haultron Energy?

Haultron Energy is one of South Africa’s leading EPC firms in the renewable energy space. We combine technical precision, sleek design, and operational clarity to deliver solar PV systems that are not only high-performing but also fully compliant with tax and regulatory frameworks.

Whether you're a commercial property owner, industrial operator, or agricultural business, we tailor every solar deployment to your energy needs and financial goals.

Ready to optimize your solar investment?
Contact Haultron Energy today for a consultation and let’s build a brighter, tax-smart future together.