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Mike

New Tax/Levy for Licensed Electricity Generators

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New Tax/Levy for Licensed Electricity Generators

The new levy has effectively been signed by the minister and has been back-dated to the 1st April 2018.

Not having any other pertinent information contained in volume nr 635 of the 8th May 2018 Gazette nr. 41615 simply contains the text as indicated in the image below.

image showing the original document signed by the minister

New Levy for registered electricity generators

The Term "electricity generators" referred to in the document would seem to suggest large generators that have generation licenses and would probably include the likes of all the REIPPP plants as well as any subsequent large solar PV rooftop or ground-mount plants that are registered with NERSA as generators.

It may also impact municipalities generating their own power.

Downstream this may have an impact on end-users, as well as affecting the financial feasibility and pay-back or ROI of large generation facilities.

All generators less than 1MW does not seem to be affected by this notice.

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Just to clarify if you where completely off-grid and not connected to the grid then you would not have to register as a "electricity generator" and thus regardless of your generation capacity you would not be subject to this levy?

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this is debatable right now as they are putting a new registration process in place for all on or off grid installations inclusive on Generators to be registered with Nersa, so I presume the same is going to apply at some point. They want to draw blood from a stone in taxes 

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5 hours ago, PJJ said:

Just to clarify if you where completely off-grid and not connected to the grid then you would not have to register as a "electricity generator" and thus regardless of your generation capacity you would not be subject to this levy?

The new Nersa registration requirement is for ALL systems below 1MW to register both on-grid and off-grid, that is why everyone is bitching (including me!) Thais includes PV system, generator systems, pig-shit to power systems - everything.

The only systems excluded from the requirement are systems dedicated to backup only [so only in use when service provider fails].

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We can only wait and hope that all small "Home" systems and their generators are excluded.. Thanks Mark for the update..

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Silver, you heard right, apparently it is being withdrawn due to the public outcry.There is a process they have to follow to withdraw, but they also state that it will most likely return in another way / time frame.

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2 minutes ago, Mike said:

Silver, you heard right, apparently it is being withdrawn due to the public outcry.There is a process they have to follow to withdraw, but they also state that it will most likely return in another way / time frame.

those were the exact words the lady on the radio used ;)

And, yes, sadly, well all end up paying for everything somehow. Take e-tolls, everyone is paying more taxes and VAT now that it's "scrapped". In the end "the house always wins", or rather the powerful and greedy always win

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5 hours ago, SilverNodashi said:

Take e-tolls, everyone is paying more taxes and VAT now that it's "scrapped".

That is indeed what some people advocated for: That it be paid for like all other roads. The objection raised against this was that it is unfair for people in other provinces to pay for a road in Gauteng. In answer to that, it was pointed out that Gauteng is the economy's power house and other provinces benefit from that road too. Either way, regardless of how it is paid for, the real problem with it was the way it was structured to pay some consortium millions to manage it, in other words, the real problem was the corruption concerns.

It comes down to whether you are the customer or the product in many cases. If I pay for something, in most cases I am the customer. I pay the provider, and I get a service. But in some cases I am actually the product: I'm sold as an investment opportunity towards someone else who will make money off of me. So the real issue with eToll was not that customers were expected to pay for a service, it's that the customer effectively became a product, securitised to be sold off to investors.

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55 minutes ago, plonkster said:

The objection raised against this was that it is unfair for people in other provinces to pay for a road in Gauteng.

See below;

Province Total number of tax payers /Average taxable income /Total taxable income/ Percentage of total taxable income
Eastern Cape 440 406 R193 931 R85.41 billion 7%
Free State 258 998 R178 251 R46.17 billion 3.9%
Gauteng 1 847 903 R272 188 R502.98 billion 42.6%
KwaZulu-Natal 707 335 R208 142 R147.23 billion 12.5%
Limpopo 261 252 R196 862 R51.43 billion 4.4%
Mpumalanga 301 871 R212 113 R64.03 billion 5.4%
Northern Cape 111 572 R184 038 R50.97 billion 4.3%
North West 276 937 R187 702 R20.94 billion 1.8%
Western Cape 801 441 R228 053 R182.77 billion 15.5%
Unknown province 166 857 R177 602 R29.63 billion 2.5%

As can be seen above almost HALF of all costs covered by the fiscus is contributed by Gauteng tax payers, so I think the "unfair" complaint is a bit lame. Otherwise just spend ALL Gauteng tax in Gauteng, then we can pay for the road on Friday:)

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That's why since there is no rubbish removal or municipal dump here in NW (side of the road doesn't count), I take all my rubbish to the dump in GP, over the provincial border. Thanks guys (and Supra)!

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8 minutes ago, pilotfish said:

Just make sure to pay your e-tolls here in GP when you come to steal our services:D

I have a bill somewhere of R50 or something, from back in 2015. They only sent the one...

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This is a reply from Ted Blom re Nersa's attempt at robbing solar generators :

After receiving comments from over 24 000 highly concerned people, we sent objections to Nersa detailing reasons why licencing generators and solar panels is not an acceptable proposal.
Well, Nersa announced they will be withdrawing the draft rules. 
BUT - as governance laws bind Nersa, they cannot withdraw before the public comment period ends on 31 May. Once done, they will re-draft to align with a government gazetted Licensing Exemption and Registration Notice and then re-open the new rules for public comment.

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I listened to that interview and it does correlate with my initial understanding: That it is about planning and possibly regulating the safety aspects. I remain skeptical about the "planning" aspect for small systems. Granted, when you're looking at 100KW systems on shopping centers or similar I can understand that maybe you'd want to know about those, but anything under 15kw (roughly the grid connection size of a single-phase home) seems like small change. Do we really have enough affluent people who would install a system that large that it could affect planning on a national scale? Not a rhetorical question... I'd like to see the reasoning behind that.

Of course I also know that systems adapt to avoid the pain that might be externally introduced. If the regulations were to say that systems under 4kw need not register (for example), the effect of that would be that suddenly a large number of systems will be sized exactly to avoid that. The solar water heater might suddenly come back into vogue (cause you can no longer oversize the PV side and use the surplus to heat water), swimming pool pumps will suddenly shrink, people would possibly spend more money on reducing their consumption... if you level a tax on a cup of coffee, the vendors will sell coffee in larger cups. That's how it works.

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8 hours ago, plonkster said:

I listened to that interview and it does correlate with my initial understanding:

Still does not account for them wanting off-grid systems registered. I suspect they will try and introduce this over the Xmas break (standard ANC practice for anything when they try introduce controversial legislation.

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On 2018/05/16 at 11:33 AM, plonkster said:

it is unfair for people in other provinces to pay for a road in Gauteng

what ever happened to the republic of wp drive?

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2 hours ago, Chris Hobson said:

I suspect they will try and introduce this over the Xmas break

I hope that they do - that will give OUTA ammo in court to send them back to the drawing board and delaying for another 6 months.

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41 minutes ago, plonkster said:

Aaaah you mean like the only good thing to come out of Gauteng? The road to Cape Town? :-P

I must have miss-heard - I thought that the saying went "the only good things in WP came out of Gauteng":D

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10 hours ago, plonkster said:

The road to Cape Town? :-P

what i ACTUALLY meant is the 'republic of wp' - but the road is important, it'll be congested though, one way south...:)

Edited by gabriel
spelling

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