The 12L Energy Efficiency Tax Incentives

1. 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

2. Total Number of 12L Projects
Phases Value
Performance Assessment 32
Baseline Completed 27
Baseline in Progress 15
Deregistered 07
Inactivated Applications 73
Certificates 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

3. Provincial Breakdown
Share By Province
Gauteng Mpumalanga Kwa-Zulu Natal Free State Eastern Cape Western Cape Northern Cape North West Unknown

4. Total Impact, (as at 31 December 2016)
Energy savings : 6 187 812 870 kWh
Total amount claimed : R 2 897 766 587. 66

5. The Application/Approval Process

6. New Development: Who does M&V Lite apply to?
-
20
40
60
80
100
120
140
160
R-
R500,000
R1,000,000
R1,500,000
R2,000,000
R2,500,000
R3,000,000
R3,500,000
R4,000,000
1
120,001
240,001
360,001
480,001
600,001
720,001
840,001
960,001
1,080,001
1,200,001
1,320,001
1,440,001
1,560,001
1,680,001
1,800,001
1,920,001
2,040,001
2,160,001
2,280,001
2,400,001
2,520,001
2,640,001
2,760,001
2,880,001
3,000,001
3,120,001
3,240,001
3,360,001
3,480,001
3,600,001
3,720,001
3,840,001
3,960,001
M&VCOSTSASAPERCENTAGEOFNETTAXBENEFIT
TAXBENEFIT(R)
ENERGY SAVINGS (KWH)
Net 12L Benefit (R) Total tax rebate (R) @95c/kWh Ac_% Log. (Ac_%)
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.

7. 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!

8. www.sanedi.org.za