South Africa's Section 12B Drives Record Commercial Solar Year
By YourWatts Editorial · Source: South African Photovoltaic Industry Association
South Africa's Section 12B accelerated depreciation incentive — which allows businesses to deduct 125% of the cost of qualifying renewable energy assets in the year of commissioning — has driven a record 2025 for commercial solar installations, according to the South African Photovoltaic Industry Association (SAPVIA). Total commercial and industrial PV capacity grew by 1.4 GW during 2025, more than double the 2023 baseline. The 125% Section 12B uplift applies to investments commissioned between March 2023 and February 2025, and was extended through February 2027 in the most recent budget. The combination of severe Eskom load shedding, high commercial tariffs, and the tax incentive has made commercial solar a near-default investment for South African businesses with available roof space. Residential solar has also continued to expand, though at a slower pace than the commercial sector, partly because the residential Section 6C tax rebate of 25% (up to ZAR 15,000) expired on February 29, 2024 and has not been renewed. SAPVIA continues to lobby for a renewed and expanded residential incentive, arguing that household solar adoption is critical to managing peak grid demand and reducing reliance on aging coal plants. NERSA's net metering regulations remain in force, allowing residential customers to feed surplus energy into the grid where their municipal distributor accommodates this — practice varies significantly between Cape Town, Johannesburg, and other major metros.