By Lehlohonolo Lehana.
President Cyril Ramaphosa says as per his energy plan announced last year, government was “going to proceed with the rollout of rooftop solar panels”.
Ramaphosa said that finance minister Enoch Godongwana will soon announce measures by the National Treasury to boost the rollout of solar, including tax breaks.
Delivering his State of the Nation Address on Thursday (9 February), the president said that “unleashing” own generation among private households and businesses is a key part of the country’s wider plans to end the load shedding crisis.
This was point four in the broad five-point plan to end the crisis:
- Fix Eskom and improve the availability of the existing electricity supply
- Enable and accelerate private investment in generation capacity
- Accelerate procurement of new capacity from renewables, gas and battery storage
- Unleash businesses and households to invest in rooftop solar
- Fundamentally transform the electricity sector.
While the national government is not deviating from this plan, swifter action is being taken to fast-track certain actions.
He said that during the 2023 Budget scheduled for 22 February, the minister of finance will announce how households and businesses will benefit from a tax incentive relating to rooftop solar.
Beyond the tax breaks, National Treasury will also look at other measures to boost solar availability for businesses.
On Tuesday SA Revenue Service Commissioner Edward Kieswetter said that the tax authority had been “engaged already by colleagues in the Treasury to say we should be reviewing additional measures to provide some relief and incentive for people to make an investment in their own become a little bit more self-sufficient”.
Ramaphosa said that Treasury will make adjustments to the “bounceback” loan scheme, which was severely underutilised following the Covid-19 pandemic, to help small businesses to invest in solar equipment.
Banks and financial institutions will also be allowed to borrow directly from the fund to help facilitate the leasing of solar equipment to small businesses, he said.
Treasury previously hoped that that the scheme would also help businesses recover from the flooding in KwaZulu-Natal and the July 2021 unrest in that province and Gauteng.
Although it is still unclear what the adjustments to the scheme will be, currently only businesses with a maximum turnover of R100 million per annum qualify. Businesses can approach banks, SME finance providers or development finance institutions to borrow between R10 000 and R10 million.
Solar-powered systems can feed electricity into the grid through an inverter, without needing a battery, but storage becomes critical when wanting to power households outside of daylight hours, when national supply comes under the most pressure at peak demand times. Without adequate energy storage systems, South Africa’s grid won’t fully benefit from rooftop solar panels during the hours when it needs it most.
And it’s not just batteries driving up lead times for solar panel installations. There’s also a shortage of polysilicon, a form of silicon used to produce solar modules.