Solar Investment Tax Credit
Unlock the financial benefits of investing in solar power today & grow your investment portfolio while reducing your tax liability.
HARNESS THE POWER OF THE SUN
Tap Into Sustainable Investments & Reap Tax Benefits
South Africa, a land basking in abundant sunshine, offers an attractive proposition for savvy investors looking to contribute to sustainable energy development. The Solar Investment Tax Credit, specifically under Section 12B, is not your typical environmental support scheme. It’s an opportunity for investors and businesses to directly fund solar operators, catalyzing the growth of solar energy infrastructure. This tax incentive is particularly geared towards empowering commercial-scale solar projects, ensuring investors not only contribute to a greener future but also enjoy substantial tax benefits.
MINIMUM
Low Barrier To Entry
Invest a minimum of R500 000
EARN
Annual Dividends
Investors receive annual income distribution for 10 years
Low Risk
De-Risk in 2 Years
We aim to de-risk investors by returning the investment amount within 2 years
Understanding the Section 12B Solar Investment Tax Credit
The Section 12B of the Income Tax Act in South Africa provides a tax incentive for investors who fund solar photovoltaic (PV) operators. This investment enables the expansion and operation of solar power systems, playing a pivotal role in the nation’s transition to renewable energy sources. Under Section 12B, investors can deduct up to 125% of their investment from their taxable income in the year the investment is made. This lucrative incentive is designed to accelerate investment in solar energy projects, providing significant tax relief while promoting sustainable energy solutions.
This investment not only provides exposure to the thriving solar market but also offers a unique opportunity to claim a tax deduction of 187% on the investment value. This means that investors can claim up to 90% of their investment back within the first year through SARS refunds and cash inflows. In other words, for every R100 invested, investors in the highest tax bracket can expect to receive up to R90 back in the first year.
Who Can Benefit?
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Wealthy Investors and Businesses: Ideal for those looking to diversify their portfolios into green energy.
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Solar Operators: Companies focused on the installation, maintenance, and management of solar PV systems.
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Commercial Clients: Entities seeking to adopt solar energy through installations and power purchase agreements (PPAs) facilitated by solar operators.
How The Investment Works
- Investment in Solar Operators: Investors fund solar operators who specialize in installing and maintaining solar PV systems. This funding is crucial for operators to scale their services and infrastructure.
- Engagement of Commercial Clients: Solar operators use these investments to provide solar solutions to commercial entities, which typically include installing solar systems and managing PPAs.
- Tax Deduction Benefit: Investors can claim a deduction of up to 125% of their investment against their taxable income for the year in which the investment is made.
Why Invest Under Section 12B?
Attractive Tax Incentive: A deduction of 125% is a substantial tax break, significantly reducing the investor’s taxable income.
2. Support Green Energy: Investments support the growth of sustainable energy, reducing reliance on fossil fuels and aiding environmental conservation.
3. Economic Growth: By supporting solar operators and energy infrastructure, investors also contribute to job creation and technological advancements in renewable energy.
How To Make a Section 12B Solar Investment
Fill Out Our Enquiry Form
The very first step towards a lucrative section 12B investment starts with filling out our online enquiry form.
Identify Investment Opportunities
Our investment partner looks for reputable solar operators or investment schemes that qualify under Section 12B.
Perform Due Diligence
We evaluate the financial stability, track record, and growth potential of the solar operator and their commercial clients.
Understand The Terms
Get clear on the terms of your investment, including time frames, expected returns, and exit strategies.
Claim Your Tax Credit
When filing taxes, declare your investment under Section 12B to claim your deduction. Consulting with a tax advisor specializing in renewable energy investments is advisable for compliance and maximization of benefits.
Frequently Asked Questions
Is the Section 12B tax credit a once-off benefit?
Yes, the tax deduction under Section 12B can be claimed in the tax year in which the investment is made.
Can foreign investors also benefit from this tax credit?
Foreign investors should consult with tax professionals to understand the implications based on their tax status in South Africa.
What risks are involved in Section 12B investments?
Like any investment, Section 12B carries risks, including project execution risks and solar operator performance. Due diligence and professional advice are recommended.
Can the Section 12B deduction exceed my taxable income for the year?
Investing in offshore properties may not be suitable for everyone and depends on individual financial goals, risk tolerance, and investment preferences. Offshore property investments are typically considered for investors looking to diversify their portfolios, seek potential higher returns, and have a long-term investment horizon. It’s important to assess personal circumstances and consult with financial advisors to determine if offshore property investments align with your specific needs and objectives.
Can an investment in a solar project be pooled with other investors under Section 12B?
Yes, investors can pool their resources to invest in larger solar projects. However, each investor’s claim on the tax deduction would typically be proportional to their investment in the project.
The Future of Solar Investments in South Africa
As South Africa intensifies its focus on renewable energy, Section 12B investments represent not just a tax-saving strategy but also a step towards a more sustainable and responsible energy future. As solar technology evolves and becomes more cost-effective, the potential for solar investments under Section 12B is set to expand, offering even more lucrative opportunities for investors committed to a greener world.
The Section 12B Solar Investment Tax Credit offers a unique blend of financial and environmental returns. It’s an opportunity for investors to play a vital role in shaping South Africa’s energy landscape while securing impressive tax benefits. Embrace the power of the sun and be part of the sustainable energy revolution in South Africa.
An Investment Strategy That Works For YOU
We provide risk-adjusted investment opportunities by generating our investors income through tax-deductible solar investments.