South African Revenue Service
Section 12B / 12BA Tax Allowances
At a glance
Who qualifies
- South African taxpayer (company, close corporation, sole trader) with taxable income
- Asset generates electricity from renewable sources (solar PV, wind, biomass, biogas, hydro)
- Asset is new and unused, brought into use in the tax year of claim
- Asset is used in the trade of the taxpayer
- Full technical and commissioning records maintained
Who does not qualify
- Private residential installations (no trade use)
- Second-hand or repurposed equipment
- Diesel generators or fossil-fuel-based systems
- Assets used personally rather than in a trade
Documents you bring
- Detailed invoices for the generation asset and installation
- Commissioning certificate signed by the installer
- Technical specification and photos of the installed system
- Proof of trade use (business connection, meter records)
- Full company / sole-trader tax records for the year of claim
The enhanced 150% first-year deduction under Section 12BA ended on 1 March 2025. Section 12B (100% year-1 for renewables) continues indefinitely for businesses.
How to apply
- Confirm your renewable-energy asset qualifies under Section 12B (solar PV, wind, biomass, biogas, or hydro).
- Keep detailed invoices, commissioning records, and photos throughout installation.
- Ensure the asset is used in your trade before the tax year-end.
- In your annual income tax return (ITR14 for companies, ITR12 for individuals in trade), claim the full asset cost under Section 12B.
- Attach supporting schedules if SARS requests verification.
- SARS may audit; retain all records for 5 years minimum.
Speak to your tax practitioner before finalising a large solar purchase. The interaction between Section 12B, Recoupment on sale, and CGT can materially change the after-tax cost.
Home solar does not qualify, even if you work from home
Section 12B requires the asset to be used in a trade. Solar on a purely residential property will not qualify, even if you run a side business or side-hustle from the same address; SARS looks at the primary use of the property. To qualify, the solar system typically needs to be installed at a business address (office, workshop, farm), or a portion split-metered for the trade activity.