Income Tax Act-based allowances for energy efficiency: Parts 1 and 2

In Part 1 of this article the financial, technical and organisational support afforded by local government through the Income Tax Act of 1962 for energy efficiency tax incentives was explained. Part 2 highlights the concurrent benefits of standardised energy efficiency practices.


Tax incentives

Organisations wishing to claim tax incentives

The Regulation released for comment stipulates that organisations wishing to claim energy efficiency tax incentives according to the 12L Regulation should take the following steps:

  • Formally appoint an M&V Professional who is part of a SANAS Accredited M&V Body. Registered Certified M&V Professionals are listed on the Council for Measurement and Verification Professionals of South Africa (CMVPSA) website at with the SANAS Accredited M&V Bodies listed on the SANAS website at
  • Register with South African National Energy Development Institute (SANEDI) for energy efficiency tax allowance claims at supplying your, and the SANAS Accredited M&V Body’s details.
  • Task the M&V Professional to compile an M&V plan and baseline report in accordance with SANS 50010 for the energy efficiency savings.
  • Submit the M&V Professional’s M&V plan and baseline report to SANEDI at the beginning of the financial year for which you want to claim the tax incentive.
  • SANEDI will furnish you with the approval for continuance.
  • On the successful completion of the tax incentive approval process SANEDI will issue a formal energy savings certificate.
  • Submit the certificate to the South African Revenue Service (SARS) together with the claim for the tax allowance as part of the customary tax returns.

It should be noted that the 12L Regulation is out for comment and some of the procedures mentioned might change once finalised.


Take note

  • Energy efficiency tax grants are for all energy sources.
  • Savings have to be Measured and Verified by an independent professional for 12i and 12L.
  • SANS 50101 is a requirement for the tax incentive.
  • No double-dipping is allowed.
  • Measurement and Verification has little value unless it is done meticulously.
  • Use an M&V professional who is part of a SANAS accredited M&V body.
  • Knowledge on M&V and energy efficiency is a sought-after skill.


Published in: Electricity+Control:December 2011 (pgs 12 – 14); (January 2012 (pgs 18 - 20)

By Y de Lange, Southern African Association for Energy Efficiency (SAEE)