Resumen

HAMER, W. et al. Testing concurrent benefits for Section 12L tax incentives in South Africa. J. energy South. Afr. [online]. 2020, vol.31, n.4, pp.57-71. ISSN 2413-3051.  http://dx.doi.org/10.17159/2413-3051/2020/v31i4a8674.

The South African energy crisis harms the economy. Tax incentives are intended to help, but rules for incentives must be understood by all stakeholders for taxpayers to be encouraged to invest. Section 12L (S12L) is relatively new legislation that allows a tax deduction for verifiedyear-on-year energy efficiency savings in South Africa. Concurrent benefits are excluded from this tax incentive, to prevent a double reward for the same activity. Although the prevention of double benefits is commonly addressed in the field of measurement and verification (M), non-technical guidelines are not available. This is a critical shortcoming since multiple professions (tax, audit and legal) need to understand the technical M requirements of S12L. This study reviews the current legislation and interpretations of concurrent benefits in terms of S12L. It shows that multiple energy-related incentives are utilised by industries and that, therefore, it must be determined if different programmes overlap, so as to create concurrent benefits with S12L. It is then critical to correctly apply M to ensure exclusion of concurrent benefits. This study also provides a simplified methodology to evaluate concurrency, based on the S12L regulatory requirements and standard M methods. Three case studies show how concurrency can occur and how M practice is applied to exclude double benefits. The test for concurrency is shown to reduce to the following question: Is the same energy saving funded twice? The tests must be done to ensure no double benefit occurs. HIGHLIGHTS: • Multiple energy efficiency and power generation programmes are required to address the energy crisis South Africa. • Concurrency tests are developed to ensure double rewards are not paid for the same energy efficiency savings. • Simple and clear communication of the technical tests to different disciplines (e.g. energy, tax, audit and legal) is important. • Proposals for policy development and communication of S12L incentives and carbon tax are made.

Palabras clave : energy efficiency; measurement and verification; concurrency; multidisciplinary communication.

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