Installation of a solar system at a home operated business

[Isetech]

I am sure this is a question many people would like to hear the answer.

If I operate my business from home, can I claim the cost of a solar installation to keep the business operating?

How much of it can I claim? I dont need it for general home electricity, I have a small inverter for my lights and TV.

A standard 5 kw system installed ranges from R120K - R200K

An 8 KW system between R225K - R350K

To go "off grid", I need a 16 KVA inverter with at least 20kwh of battery and a generator big enough to charge the batteries and keep the computers, and machinery operating. the cost with a decent diesel generator is going to cost well over R300K

How much of the cost can you claim?

Someone suggested I fit the system and take a bank loan, then bill the company monthly for the use. IF I do it this way I now create a income which becomes taxable?

I know for a fact because I am getting the calls daily requesting solar installations.

The next question, what if I dont run a business from home, would it not be a smart thing to do. Start a small business selling cupcake to the neighbours for now and grow it.

[Financial Coach]

Is the business a sole prop, or a regular separate legal entity registered business

[Isetech]

I was a sole proprietor but now a Closed corporation (CC).

[Isetech]

The business is a stand alone building on the same property as the home I live in.

The idea is to fit the solar on the business only.

[Financial Coach]

I was a sole proprietor but now a Closed corporation (CC).

Seeing as this is a CC now, if you were one of my customers I would recommend the following.
One thing you have to keep in mind, is that the people working at SARS are only human, and you have to approach these questions from a human aspect and if they would make sense to a regular man on the street.
With that said, if you can prove without a shadow of a doubt that the solar only feeds into the section that is 100% occupied only for 100% business activities, then you will not have an issue with claiming the full installation and running costs under the business.

Now I don't know your setup and if it would be possible to have this 100% proof of the split.

So if there is not the 100% proof then I would recommend the following,
Get the invoices for everything , Solar hardware and installation made out to your CC, obviously. (side tangent, I hope you are registered for VAT so you can claim that back)
Then claim all the expenses for this through the business,
Then you take the past 12 months invoices for your residential electricity, looking at the KWH usage, and not the cost, seeing as cost can fluctuate with price increases but KWH usage should stay roughly the same as long as you did not drastically change something, like started crypto mining which would substantially increase your usage.
Get a tool to measure your business equipment electricity usage (you would need this to properly spec your Solar setup anyway) Then you know your business consumption, which should be the saving in your future electricity bills if your solar was specked properly.

Lets say your regular private consumption would be 500KWH and business according to the calculations would be 500KWH, which would be your total regular bill that is not split.
Now after the solar installation your new (total) bill drops to 200KWH instead or the regular 1,000KWH
So now you know the business is covered and 60% of your private usage is also covered with the solar that belongs to your business.
Then the CC (which is its own legal entity) has to invoice you in your private capacity for the 300KWH at the same KWH rate you would have paid the council, which you are saving due to the Solar.
That way you are not personally any better or worse off due to the installation, and the Solar expenses can 100% be claimed through the CC.
Now this approach would make sense to SARS officials once properly explained, because it makes sense.

Like I said in the beginning, this is the advice I would have given if you were one of my customers, but you are not, so I did not give this advice. LOL