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Tax experts unimpressed with solar energy incentive

Author: Amanda Visser

A new government intervention to encourage the development of solar units recently took effect, but tax experts question how effective it will be in encouraging the adoption of solar energy.


The Income Tax Act already provides for an accelerated capital allowance on assets used in the production of electricity in the renewable energy sector by means of wind, biomass or hydro generation.

However, the government has decided to accelerate depreciation from the current three-year period to a one-year period of 100% depreciation. It applies only to small-scale solar photo-voltaic (PV) renewable energy with a generation capacity of less than 1MW.


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