South Africa offers corporate tax incentives for energy efficiency

The Department of Energy of South Africa has announced new tax incentives for companies implementing an energy efficiency programme and proving verified energy savings as of 2014. Companies would receive a R0.45 (US$0.43c) tax deduction for every kWh saved. The Regulations on the Allowance for Energy Savings will be linked to the tax process of the South African Revenue Service (Sars). This regulation will be implemented ahead of the proposed Carbon Tax Policy, expected to be implemented in 2015.

Moreover, the Private Sector Energy Efficiency (PSEE) project was launched to provide support and advisory services to businesses, targeting 60 large companies and over 1,000 medium sized companies. Large companies with energy expenses of over R45m/year (US$4.3m) would receive up to 60 days of consulting over energy management systems and energy audits; the PSEE project would finance 60% of the energy efficiency assessment. Medium-sized companies with annual energy expenses of R750,000 - 45m (US$72,150 - 4.3m) would receive four days of fully subsidise, direct on-site consulting support.

These measures are aimed at contributing to the National Energy Efficiency Strategy of 2005, which had set out a national target of 12% of energy intensity reduction. This would require a 10% reduction in energy consumption by the residential subsector, a 15% reduction by the mining and industrial sector, a 9% reduction by the power generation sector, a 15% reduction by the commercial and public buildings sector and a 10% reduction in energy consumption by the transport sector.