Solar tax incentives can significantly improve the return on investment for businesses installing solar PV systems.

Under Section 12B of the Income Tax Act, businesses can claim accelerated depreciation on renewable energy assets such as solar systems. In many cases, this allows businesses to deduct 100% of the solar installation cost from taxable income in the first year, reducing their corporate tax liability. For VAT-registered businesses, the 15% VAT paid on the solar system can also be claimed back as input VAT, further reducing the overall cost of the investment.

Previously, a temporary incentive allowed businesses to claim 125% of the system cost as a tax deduction for systems installed between 1 March 2023 and 29 February 2024. Businesses should consult their tax advisors regarding eligibility and current incentive structures. These incentives help businesses reduce upfront costs, lower energy expenses, improve ROI, and decrease their carbon footprint while gaining greater energy independence.