National Treasury published section 12L on 8 November 2013 in Government Gazette No. 37019 which puts into operation deductions of energy efficiency savings in terms of the Income Tax Act of 1962.
This long-awaited announcement is welcomed by the Certificated Measurement & Verification Professionals (CMVP) industry that has been advising clients to prepare for the imminent release for a while now.
Minister Pravin Gordhan, Minister of Finance, gave notice that that section 12L of the Income Tax Act, 1962 (Act No. 58 of 1962), (Deduction in respect of energy efficiency savings), as inserted by section 27 of the Taxation Laws Amendment Act, 2009 (Act No. 17 of 2009), amended by section 27 of the Taxation Laws Amendment Act, 2010 (Act No. 7 of 2010), and substituted by section 29 of the
Taxation Laws Amendment Act, 2012 (Act No. 22 of 2012), comes into operation on 1 November 2013.
The 12L allows deductions calculated at 45 cents per kilowatt hour or kilowatt hour equivalent of energy efficiency savings. A person claiming the deduction must obtain a certificate issued by an institution, board or body prescribed by the regulations. Such bodies can be found on the South African National Accreditation System (SANAS) website www.sanas.co.za.
To claim for energy efficiency savings from National Treasury the Regulation requires that a baseline must be set at the beginning of an assessment year with a reporting period of the energy use at the end of the year of assessment and that such savings calculations meet the full criteria and methodology used to calculate energy efficiency savings. No double dipping is allowed, which means concurrent benefits in respect of the energy efficiency savings may not be received.
To find persons qualified to provide M&V services, the Council for Measurement and Verification of South Africa (CMVPSA) is an independent professional Measurement & Verification (M&V) Body that represents the South African M&V industry and ensures that the quality of M&V services and service providers are credible, trustworthy and transparent. Their website is www.cmvpsa.org.za
. CMVPSA upholds the highest standards and requirements for M&V in accordance with the Efficiency Valuation Organisation (EVO) International Performance Measurement & Verification Protocol (IPMVP), the internationally recognised protocol for performance M&V which provides a consistent, reliable approach to M&V around the world.
The Association of Energy Engineers (AEE), in cooperation with EVO established the CMVP training programme which is locally presented by the AEE’s sole training partner for the Southern African region the Energy Training Foundation (EnTF). EnTF is also an EWSETA training provider and the affiliated training provider of the Southern African Association for Energy Efficiency (SAEE). The CMVP qualification requires attending a 2 day intensive M&V training course, writing and passing the prescribed international examination on the 3rd day, and passing the examination with a minimum of 70% within the required time allowed. Thereafter a candidate may apply for Certification to the local CMVP Board who will review the candidates’ current qualifications and experience in the M&V industry. After positive recommendation by the local board, a recommendation is made to the AEE’s international CMVP Board for Certification. AEE keeps tight control of the quality of candidate that receives Certification in that it requires maintaining Certification through continuing education and providing proof thereof for re-Certification every 3 years.
The AEE has been developing the energy engineering field for over 36 years. In total AEE is active in 90 countries with 14 000 CEMs whom are collectively active in every single continent in the world, and just short of 3 000 CMVPs in 28 countries.
The EnTF presents CMVP training throughout the country at various venues. The next scheduled courses will be in Cape Town on 12-14 March 2014, Johannesburg on 14-16 May and 22-24 October 2014, and in Kenya on 23-25 June 2014.
CMVP training carries 3 CPD credits with ECSA. For M&V candidates that need to rewrite examinations in order to become Certified with the AEE, the EnTF will be hosting additional examination days in the next few weeks in Pretoria, Potchefstroom, Port Elizabeth and Durban.