The12L Energy Efficiency Tax Incentive INCOME TAX ACT, 1962 REGULATIONS IN TERMS OF SECTION 12L OF THE INCOME TAX ACT, 1962, ON THE ALLOWANCE FOR ENERGY EFFICIENCY SAVINGS Energy Efficiency SANEDI 22 February 2017
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The12L Energy Efficiency Tax Incentive
INCOME TAX ACT, 1962
REGULATIONS IN TERMS OF SECTION 12L OF THE INCOME TAX ACT, 1962, ON THE ALLOWANCE FOR ENERGY EFFICIENCY SAVINGS
Energy EfficiencySANEDI22 February 2017
Total Number of 12L Projects
Phases Value
Performance Assessment 32
Baseline Completed 27
Baseline in Progress 15Deregistered 07
Inactivated Applications 73Certificates Issued 24
Total projects in the system 154
Total number of projects, as at 31 December 2016 Table 1: Total Number of Projects by Phase
Provincial Breakdown
Share By Province
Gauteng Mpumalanga Kwa-Zulu Natal Free State Eastern Cape Western Cape Northern Cape North West Unknown
Total Impact, (as at 31 December 2016)
Energy savings : 6 187 812 870 kWh
Total amount claimed : R 2 897 766 587. 66
Email Confirmation
Registration Process
SANEDI ONLINE Tool
Project BaselineDocument
ClaimantM&V
Email Notification
Approval
SANEDI Panel
Activation
SANEDI Panel
RejectApprove
Tax CertificateandSARS Process
Reject
Implementation PerformanceAssessment
The Application/Approval Process
New Development: Who does M&V Lite apply to?
1.00 120,001.00 240,001.00 360,001.00 480,001.00 600,001.00 720,001.00 840,001.00 960,001.00 1,080,001.00 1,200,001.00 1,320,001.00 1,440,001.00 1,560,001.00 1,680,001.00 1,800,001.00 1,920,001.00 2,040,001.00 2,160,001.00 2,280,001.00 2,400,001.00 2,520,001.00 2,640,001.00 2,760,001.00 2,880,001.00 3,000,001.00 3,120,001.00 3,240,001.00 3,360,001.00 3,480,001.00 3,600,001.00 3,720,001.00 3,840,001.00 3,960,001.00
R-
R500,000
R1,000,000
R1,500,000
R2,000,000
R2,500,000
R3,000,000
R3,500,000
R4,000,000
-
20
40
60
80
100
120
140
160 Net 12L Benefit (R) Total tax rebate (R) @95c/kWh Ac_% Logarithmic (Ac_%)
Energy Savings (kWh)
TAX
Bene
fit (
R)
M&
V co
sts a
s a P
erce
ntag
e of
Net
Tax
ben
efit
50%
M&V costs typically exceeds 50% of the net tax benefit for projects that save less than 480 000kWh per year. It is proposed that M&V Lite be applied to these projects.
Conclusion
The increase in the the allowance rates from 45c/ kWh to 95c/ kWh resulted in a substantial increase in interest in this incentive, with phenomenal results!
This resulted in some challenges in the administrative component of processing these applications, especially with respect to the current online processing system, which will shortly be revamped.
Other than that, the market has responded extremely positively to this incentive, which is indirectly linked to the pending Carbon Tax, (due for implementation 2017???).
Promising to unlock huge energy efficiency potential in a way that leverages broader, sustainable benefits!
www.sanedi.org.za
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