To assist the growth of the local green sector the South African government has provided financial support through the Income Tax Act of 1962; technical support in the form of South African National Standards (SANS); assurance through the accreditation of energy efficiency Measurement and Verification (M&V) Bodies by the South African National Accreditation System (SANAS); and jurisdiction through the South African National Electricity Development Institute (SANEDI).

It is important to become familiar with the stakeholders involved in regulating and controlling the system to ensure accuracy, credibility and transparency, as well as understanding the requirements by each within the tax claiming process.

The South African National Accreditation System (SANAS)

SANAS was tasked by government to create an infrastructure in order to accredit M&V Bodies for the purpose of 12L tax incentives. SANAS is the 9th largest accreditation body in the world and its technical structures are internationally recognised.

Accreditation is increasingly being used by regulators as part of managing regulatory risk, to ensure both the competence and consistency of outcomes of service providers used in the regulatory domain.

Mpho Phaloane, Senior Manager Mechanical and Physical at SANAS says that, “Government needs complete confidence in the savings results presented through 12L, and assurance that the incentives can be granted without fear of subjectivity or conflict of interest, and SANAS, as the national accreditation body of South Africa, has the infrastructure to independently confirm competence of M&V Bodies.” Bodies wishing to register for accreditation with SANAS to perform independent M&V of energy savings for energy efficiency tax incentives have to comply with ISO 17 020[5] for inspection management and SANS 50 010 for performing M&V. Details as to the SANAS requirements are available from the website

The SANAS application and assessment process of M&V Bodies involves the evaluation of staff technical competency which in this instance includes the Registered M&V Professional, validity and appropriateness of methods, traceability of measurements to national standards, suitability, calibration and maintenance of equipment, quality assurance processes, amongst others.

The SANAS requirement protects participating Accredited M&V Bodies, assists in good business management whilst ensuring sustainability of the Accredited M&V Body. Further, these controls will establish a viable M&V market, introduce job opportunities and augment local skills development.

The Measurement and Verification Council of South Africa (MVCSA)

To ensure that M&V services and service providers are credible, trustworthy and transparent an independent Professional Body was established in the form of the Measurement and Verification Council of South Africa (MVCSA), a chapter of the Southern African Association for Energy Efficiency (SAEE). Karel Steyn, Board Member of the MVCSA says, “It is important that an independent body exists to protect the interests of all M&V stakeholders and the MVCSA was established two years ago to take on the responsibility of registering and governing M&V Professionals in South Africa.” SANAS accredits the M&V Bodies, whereas MVCSA takes responsibility for the technical competency through registering qualified and suitably trained M&V Professionals, whom perform the measurement and verification for the energy saving reports under the auspices of an Accredited M&V Body.

As the nature of claiming incentives for energy savings depicts that a claim is made for a measured void, or a measure which does not exist anymore, internationally accepted methodologies are applied to ensure accuracy. These methodologies are locally standardised through SANS 50 010, the “Measurement and verification of energy savings” standard, and is a prerequisite for claiming tax incentives. M&V Professionals base their energy savings reports on SANS 50 010 and are required to be qualified to local and therefore international M&V competencies.

MVCSA only considers application for registration from Certified Measurement & Verification Professionals (CMVPs) that have the required experiential background, fulfil the academic requirements and registration is only effected after completing the mandated course and examination on “Fundamentals of energy metering, data handling, legislation and policies in the South African content and relevancy”.

The South African National Energy Development Institute (SANEDI)

SANEDI was established in terms of section 7 of the National Energy Act of 2008 (Act No. 34). It is the organisation currently tasked with the responsibility of adjudicating, evaluating and supporting 12i projects to the Minister for the Industrial Policy Project Investment incentive. SANEDI is set to undertake a similar task for the 12L incentives according to the regulation published for comment. Adjudication of the 12L tax incentive claims will be based on the reports compiled by registered M&V Professionals and SANAS accredit M&V Bodies to ensure accurate and transparent claims in alignment to SANS 50 010.

The evaluation of M&V reports will be undertaken by specialist committees as appointed by SANEDI according to the requirements specified in the Regulation, issued for comment. The documentation to accompany tax returns of organisations will be kept and maintained within SANEDI, whom is tasked to manage a database for SARS and the Minister of Finance of all reports and certificates issued. Energy savings certificates will be issued by SANEDI with a unique traceable number.

Organisations wishing to claim incentives are therefore required to appoint an M&V Professional whom forms part of a SANAS accredited body as part of the requirements of the Regulation and register its intent with SANEDI in respect of any energy efficiency savings measure for which the allowance is to be claimed.

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