Section 12BA
Solar finance glossary · South Africa
Quick definition
Section 12BA is the temporary provision of the South African Income Tax Act that granted a 125% deduction for the cost of new and unused renewable energy generation assets brought into use for the first time between 1 March 2023 and 28 February 2025.
It was introduced in the 2023 Budget as a two-year stimulus in response to the electricity crisis. Unlike the ordinary Section 12B allowance, it had no generation-capacity threshold, so solar PV, wind, hydro and biomass plants of any size qualified, and the whole 125% was deductible in the first year rather than spread over three. Second-hand equipment did not qualify.
The window has closed. Assets brought into use from 1 March 2025 onward fall back to the standard Section 12B write-off: 100% in year one for solar PV of 1 MW or less, and 50/30/20 over three years for larger systems. Section 12BA also contained a recoupment rule that applied if a qualifying asset was disposed of before 1 March 2026.
ArkFlow is a software platform that facilitates modelling the allowance that applies to a given commissioning date in the financial proposal.
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Section 12B: The Solar Tax Deduction for South African Businesses →Section 12B solar tax lets South African businesses claim an accelerated deduction on qualifying renewable assets. Here is how it works with solar finance.
ArkFlow is a software platform that facilitates solar finance origination. It is not a bank, lender, credit provider, tax adviser or financial adviser. This definition is general information, not a credit offer or advice. Funders make their own credit decisions and tax treatment should be confirmed with a registered practitioner.