Section 12L: measure energy savings before building a tax case

SARS reports that the sunset has been extended to years of assessment ending before 1 January 2031. Older Interpretation Note 95 still shows the previous cutoff; use the later SARS update for the date.

The note explains a deduction of 95 cents per qualifying kilowatt-hour or equivalent. That is a deduction from income, not 95 cents paid back for every unit saved. For an illustrative 100,000 qualifying kWh, the deduction calculation is R95,000; the tax effect depends on the taxpayer’s position.

SARS describes registration with SANEDI, measurement and verification by an appropriately accredited body, and a SANEDI certificate for the claim. Have the specialist confirm the relevant baseline, measurement boundary, reporting period and exclusions before implementation.

Keep energy records and operating context together. Changes in production, operating hours or weather can matter when comparing consumption. A smaller electricity bill alone does not prove an efficiency improvement.

An illustrative project might reduce unnecessary equipment runtime through a properly engineered control or improve the evidence used to identify waste. The engineering, safety and verification work must fit the actual plant.

Moving the same electricity use to a cheaper time can reduce cost without reducing kWh. Treat that as a different benefit until the measurement specialist confirms any qualifying efficiency saving. Do not promise eligibility for every peak-shifting, solar or predictive-maintenance project.

Include equipment or software, instrumentation, engineering, baseline work, verification, staff time and ongoing maintenance. Estimate operating savings separately from any tax deduction.

Ask the tax reviewer about overlapping incentives, exclusions and the treatment of each assessment year. Do not assume the same saving can be claimed repeatedly for a standard three-to-five-year period, or that every future claim survives a changed process. Record the basis for each estimate.

Aitsa’s current workflow services can help organise agreed operating records, responsibilities and recurring reports. They do not establish an offer to design safety-critical plant controls, certify savings or manage the SANEDI process.

If energy records are scattered, a useful first step is to define what an appointed engineer or measurement specialist needs and where that evidence will come from. Any Aitsa reporting or document workflow is separately scoped after an initial conversation.