SA businesses urged to reduce energy consumption

In a move to promote energy conservation and efficiency in South Africa, the government has extended the energy efficiency savings tax incentive for three more years. The incentive has been increased from 45 cents to 95 cents per kilowatt hour or kilowatt hour equivalent of energy saved. This initiative aims to encourage businesses to reduce their energy consumption and contribute to a more sustainable future. Barry Bredenkamp, General Manager for Energy Efficiency at the South African National Energy Development Institute (SANEDI), discussed the importance of this tax incentive and how businesses can take advantage of it. Bredenkamp highlighted that the tax rebate of 95 cents per kilowatt hour or equivalent directly impacts a company's bottom line. He emphasized that the current energy constraints in South Africa make it an opportune time for businesses to focus on energy savings. With the ongoing challenges faced by Eskom, the national energy provider, reducing energy consumption not only leads to cost savings but also benefits the overall energy stability of the country. However, one of the major challenges identified is the lack of awareness among ordinary citizens about these tax incentives. Bredenkamp clarified that the rebates are currently applicable to businesses and not private individuals. He mentioned that the government is working on streamlining the process to make these incentives more accessible to a wider range of people. This move is expected to enhance the uptake of energy efficiency measures across various sectors. The conversation also delved into the issue of subsidies in the energy sector. Bredenkamp dismissed the notion of South Africa heading towards excessive subsidies, citing the impending introduction of carbon tax as a measure to balance the fiscal impact. He stressed that the energy efficiency tax incentive is relatively small compared to the national energy consumption, but with rising electricity prices, businesses stand to benefit significantly from embracing energy-efficient practices. When questioned about the feasibility of implementing energy-efficient solutions, especially for small and medium-sized enterprises (SMEs), Bredenkamp pointed out that technological advancements have led to shorter payback periods for energy upgrades. He mentioned that the capital cost of transitioning to energy-efficient systems is now more feasible, with payback periods averaging around three years or less. The tax incentives serve as an additional bonus to the cost savings accrued from reduced energy consumption. SANEDI's role in administering the tax incentives was also discussed during the interview. As a government agency under the Department of Energy, SANEDI oversees the technical evaluation and issuing of tax certificates to eligible businesses. Bredenkamp explained that businesses can use a basic calculator on SANEDI's website to determine their eligibility and evaluate the potential benefits of applying for the incentive. Overall, the extension and enhancement of the energy efficiency savings tax incentive present a valuable opportunity for South African businesses to adopt sustainable energy practices, reduce costs, and contribute to the country's energy resilience. By leveraging these incentives and embracing energy efficiency, companies can not only drive environmental stewardship but also improve their bottom line in the long run.