🇿🇦 South Africa — 2026 Tax Year ⚖️ Not tax advice — verify with SARS

Section 12B Solar Tax Calculator

Work out your exact Section 12B deduction, tax saving, VAT position and payback period for a business solar installation — built for South African businesses, SMMEs and their accountants, not residential homeowners.

✔ Last verified: September 2026 — SARS Section 12B rules

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General guidance only, not tax advice. This calculator is based on Section 12B of the Income Tax Act 58 of 1962 as it applies in the 2026 tax year. Tax law changes, and every business's position is different. Confirm your specific circumstances with SARS or a registered tax practitioner before making decisions based on these figures.


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Who actually qualifies for Section 12B in 2026

Section 12B is a business tax incentive. It applies to a company, close corporation, sole proprietor, or farming business that carries on a trade and installs a photovoltaic solar system used to generate income. It does not apply to a salaried individual who installs solar panels on a primary residence purely for personal household use — no matter how the system is financed or how large it is.

If that's you, the honest answer is: there is currently no SARS income tax deduction or rebate available for a purely personal residential solar installation. The individual rebate that used to exist (Section 6C) expired on 28 February 2024 and has not been renewed. Keep reading below for what you can still claim, and what's genuinely available if you also run a registered business from home.

Deduction Calculator

Calculate your Section 12B deduction

Four quick steps. Nothing is sent anywhere — all figures are calculated in your browser.

Step 1 of 4
What type of entity is installing the system?
This is the first thing SARS checks. Section 12B only applies to a business carrying on a trade.
Your Section 12B Results

Card 1 — Tax Deduction Breakdown

—
Estimated total Year 1 benefit (tax saving + electricity savings)
System cost (VAT-inclusive)—
Qualifying cost for 12B (VAT-exclusive if VAT registered)—
Year 1 deduction claimed—
Tax saving at your rate—
Estimated Year 1 electricity savings—
Total Year 1 benefit—

Card 2 — Payback Period Comparison

Payback without Section 12B—
Payback with Section 12B—
Time saved by claiming 12B—

Card 4 — SARS Documentation Checklist

  • ✔Tax invoice with a clear cost breakdown separating PV panels, inverter, battery storage, mounting and installation labour from any non-qualifying items.
  • ✔Proof of "brought into use" date — commissioning certificate or sign-off from your installer, dated within the tax year claimed.
  • ✔Installation Certificate of Compliance (COC) for the electrical installation.
  • ✔Asset register entry recording the system as a fixed asset with its cost and commissioning date.
  • ✔Proof the system generates electricity — e.g. inverter monitoring data or generation logs, showing it's a functioning PV installation.
  • ✔Solar geyser costs excluded — confirm your invoice does not bundle geyser or thermal water-heating equipment into the claimed amount.

Card 5 — Multiple Business Locations: The 1 MW-Per-Site Rule

The 1 MW threshold that determines whether you get the full Year 1 deduction or a spread schedule applies per site, not per business. A business with several branches or properties can install a system at each location and have each one assessed against the 1 MW limit independently.

SiteSystem SizeThreshold TestDeduction Schedule
Branch A — Cape Town400 kWUnder 1 MW100% Year 1
Branch B — Durban750 kWUnder 1 MW100% Year 1
Branch C — Johannesburg1.4 MWOver 1 MW50% / 30% / 20% over 3 years

Each site is tested on its own merits — Branch C being over the threshold has no effect on Branches A and B.

Sizing solar for a home instead of a registered business? Try the South Africa Load Shedding Battery Backup Calculator or the Solar Geyser Savings Calculator.
Section 1

12B vs 12BA: What Changed in 2025 (And Why It Matters Now)

If you've read an article, a supplier brochure, or a LinkedIn post mentioning a "125% solar tax deduction," it's describing a scheme that no longer exists. Confusing 12B with the now-closed 12BA is the single most common mistake business owners make when budgeting for solar in 2026.

IncentiveBenefitWindowStatus in 2026
Section 6C (individual rebate)Rebate up to R15,0001 Mar 2023 – 28 Feb 2024Expired. Not renewed.
Section 12BA (enhanced business deduction)125% of cost1 Mar 2023 – 28 Feb 2025Closed. No new claims.
Section 12B (standard business deduction)100% of costPermanent, no expiryActive — this is what you claim now.
⚠️ If a supplier quote or article still promises a "125% deduction," ask which section they're referring to. 12BA closed on 28 February 2025. A business cannot claim both 12B and 12BA on the same asset — and 12BA simply isn't available for anything commissioned after that date.

The practical effect: 100% remains a genuinely strong incentive on its own. A business paying 27% corporate tax still recovers 27c of every rand spent on qualifying equipment in Year 1, on top of ongoing electricity savings and, for VAT vendors, the standard input VAT claim.

Section 2

Why Your Solar Geyser Doesn't Qualify (And What Does)

Section 12B is written around assets that generate electricity. A solar geyser heats water directly using thermal collectors — it never converts sunlight into electrical current, so it falls outside the wording of the section entirely, regardless of how the invoice is worded.

✔ Qualifies

  • • PV solar panels
  • • Inverters and charge controllers
  • • Battery storage systems
  • • Mounting structures and racking
  • • Installation labour directly tied to the PV system
  • • Cabling and DB board upgrades required for the array

✘ Doesn't Qualify

  • • Solar geysers / thermal water heating
  • • Geyser blankets or timers
  • • General roof replacement not tied to the array
  • • Unrelated building or structural works
  • • Systems not used to generate income for a trade

Installing PV and a solar geyser at the same time is common and perfectly fine — you just need the supplier to itemise the invoice so the geyser cost is clearly separated from the PV, inverter and battery cost. Only the PV-related line items go into your 12B claim. Keep the itemised invoice; it's the first thing SARS will ask for if the claim is queried.

Section 3

Residential Solar Owners: What You Can Actually Claim in 2026

If you're a salaried employee who installed solar on your home purely for personal use, here's the direct answer: there is no income tax deduction and no rebate available to you right now. Section 6C expired on 28 February 2024 and nothing has replaced it for individuals. Section 12B does not apply to you, because you're not carrying on a trade with the system.

That doesn't mean the investment was wasted. What you still get:

  • • Ongoing electricity bill savings for the life of the system, typically 20–25 years.
  • • Load shedding protection — value that's hard to put a rand figure on but real for most households.
  • • An increase in property value — installed solar is increasingly priced into resale valuations in South Africa.

One exception: if you run a registered business from home — a sole proprietorship, a small consultancy, a home-based CC — you may be able to claim the business-use portion of the system under Section 12B, apportioned by floor area or actual usage split between household and business. That claim covers only the business-use percentage, and you'll need to be able to justify the split if SARS asks. If most of your load is genuinely personal, this won't move the needle much — but it's worth discussing with your accountant if the business side is meaningful.

Section 4

Real SMME Example: R500,000 System Complete Breakdown

A Cape Town retail shop, VAT-registered, taxed at the standard 27% company rate, installs a 50 kW rooftop PV system for a total invoice cost of R500,000 including VAT. Here's the full Year 1 breakdown:

ItemAmount
Total system cost (VAT-inclusive)R500,000
VAT-exclusive cost (cost ÷ 1.15)R434,783
Input VAT claimed backR65,217
Section 12B Year 1 deduction (100%, under 1 MW)R434,783
Tax saving at 27%R117,391
Estimated Year 1 electricity savings≈ R125,000
Total Year 1 recovery (VAT + tax saving + electricity)≈ R307,608 (61.5% of purchase price)

Remaining net exposure after Year 1 is roughly R192,392. At the same electricity savings rate, that's recovered in a further 1.5 years — for a total realistic payback of around 2.5 years, compared to roughly 4 years without claiming Section 12B at all (VAT reclaim still applies either way if the business is a VAT vendor). These are illustrative figures using standard assumptions — your actual generation, tariff and tax position will shift the numbers. Use the calculator above with your own inputs for a figure specific to your business.

Section 5

SARS Audit Focus Areas — Common Mistakes to Avoid

  1. Double-claiming 12B and 12BA on the same asset. Only one section can apply per asset, and 12BA is closed regardless — but businesses that installed before 28 February 2025 sometimes try to claim both in error.
  2. Missing brought-into-use documentation. Without a dated commissioning certificate or installer sign-off, SARS has no way to confirm the asset was actually in use during the tax year claimed.
  3. Claiming solar geyser costs inside the 12B deduction. A single, non-itemised invoice covering PV and a geyser together is a common audit trigger — itemise from the start.
  4. The wrong entity claiming the deduction. If the system is invoiced to a director personally rather than the company, or vice versa, the claim sits with the wrong taxpayer.
  5. Financed-asset ownership timing confusion. Under instalment sale or lease-to-own financing, the deduction generally follows whoever holds the right to use the asset with an obligation to acquire ownership — get this confirmed with your tax practitioner before claiming, especially with third-party finance involved.

Source: Income Tax Act 58 of 1962, Section 12B. This page reflects the law as understood as of September 2026 and is provided for general information only — it is not tax advice. Confirm your position with SARS or a registered tax practitioner.

FAQ

Frequently asked questions

Can I claim Section 12B as an individual homeowner?
No. Section 12B applies to a business carrying on a trade. A salaried individual installing solar on a primary residence for personal use does not qualify, and there is currently no individual rebate available — Section 6C expired on 28 February 2024.
What's the difference between Section 12B and Section 12BA?
Section 12B gives a permanent 100% deduction with no expiry date. Section 12BA was a temporary enhanced 125% deduction that ran from 1 March 2023 to 28 February 2025 and is now closed. In 2026, 12B is the only one of the two still active.
Does a solar geyser qualify for Section 12B?
No. Solar geysers heat water thermally and don't generate electricity, so they fall outside Section 12B. Only PV panels, inverters, battery storage, mounting structures and directly related installation labour qualify.
How much can an SMME actually save on a R500,000 solar system?
For a VAT-registered SMME taxed at 27%, a R500,000 system typically recovers around R300,000 in Year 1 once VAT reclaim, the Section 12B tax saving and electricity savings are combined — cutting payback from roughly 4 years to around 2.5 years. Exact figures depend on your tariff, tax position and generation.
Can a business with multiple branches claim Section 12B at each location?
Yes. The 1 MW threshold that decides whether a system gets the full Year 1 deduction or a spread schedule applies per site, not per business. Each qualifying location is assessed on its own system size.
What happens if my business has no taxable income this year?
The Section 12B deduction reduces taxable income — it doesn't create a cash refund. If your business is loss-making, the deduction is carried forward to a future profitable year rather than paid out immediately, so there's no immediate cash benefit.
Does the R15,000 individual solar rebate still exist in 2026?
No. The Section 6C rebate of up to R15,000 for individuals expired on 28 February 2024 and has not been renewed or replaced as of 2026.
What documents does SARS require to support a Section 12B claim?
A tax invoice with an itemised cost breakdown, proof of the brought-into-use date, an installation Certificate of Compliance, an asset register entry, and evidence the system generates electricity. Solar geyser costs must be excluded from the claimed amount.