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South Africa

  • 52,982,000
  • 1,221,037 km2
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Section 12L of Income Tax 58 of 1962 (12L)

  • Location:
    South Africa

  • Types of policy:
    • Financial incentives
    • Financial Incentives for ULEB and deep retrofits

  • Implementation period:
    2013 to 2020

  • Year of latest revision:

  • Title in original language:
    Section 12L of Income Tax 58 of 1962

The 12L energy efficiency tax incentive is aimed at larger businesses that can show measurable energy savings. It started in 2013. A tax deduction is valid for all energy efficiency projects that reduce energy use. It is claimable until 2020 and is available for savings in all energy forms not only electricity. As such the potential range of the policy is great.
The tax relief is a 45 cents deduction on taxable income per kilowatt hour (kWh) of energy saved – subject to all the conditions in the 12L regulations being met. This equates to an effective kWh rate after tax deduction of 12.6c/kWh.
The Finance Minister announced in February 2015 that the 12L tax incentive will be extended and doubled from 45c/kWh to 95c/kWh for a limited period (undefined), to accelerate adoption of energy efficiency measures and contribute to the alleviation of the electricity supply constraints (Moneyweb 2015).


  • Watson, Damian (Lead author)
  • Covary, Theo (Author)
  • Adisorn, Thomas (Reviewer)

References and further reading

  • International Bank for Reconstruction and Development & The World Bank Group (2011): Implementing Energy Efficiency and Demand Side Management. South Africa’s Standard Offer Model. www.bigee.net/s/j61pmm
  • Moneyweb (2015): Tax incentive for energy efficiency more than doubled. Possible levy looms for large users. www.bigee.net/s/mkwpna
  • Radloff, G. (2014): Energy Cybernetics; 12L - what it will mean to your company. Published in: Electricity+Control March 2014 (pages 58 – 60)
  • SANEDI (2014): 12L Energy Efficiency Tax Incentive - Frequently Asked Questions. www.bigee.net/s/mdihs8
  • Vollgraaff, Rene & Mokhema, Tshepiso (2015): South Africa Needs Choice Before Carbon Tax, City Official Says. www.bigee.net/s/m4uve9
  • The World Bank (NA): CO2 Emissions (metric tons per capita) Database. www.bigee.net/s/n7pe51

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