Decentral Green Energy gives investors and their advisors direct access to a portfolio of income-generating renewable solar assets, structured under a SARS-approved Section 12B mechanism for tax efficiency.
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Designed for investors seeking upfront tax relief, annual priority profits and exposure to income-producing solar assets.
An investment in DGE will benefit you most if you:
Pay tax at or near to the top marginal rate
Have fully utilised your retirement annuity contribution
Have realised a large capital gain
Have a current year tax liability sufficient to absorb the deduction in full
In practice, money an investor would otherwise be paying to SARS is redirected into a renewable energy investment. Section 12B of the Income Tax Act allows the full cost of a qualifying renewable energy asset, including solar PV equipment, to be deducted from taxable income in the year it's brought into use, rather than depreciated over several years like most capital assets.
From R500,000, redirected from what you'd pay SARS
55:45 with senior debt into qualifying solar assets
Claim the full deduction, then earn priority profits for 20 years
Section 12B lets you deduct a qualifying solar investment from your taxable income in full, the year you make it. Decentral gears every rand of equity with senior debt at 55:45, so the deduction is claimed on the full geared amount, not just the cash you put in. Individuals, companies, trusts and partnerships can all claim it. As a Limited Partner, your liability is capped at what you invest.
Full mechanics, including the partnership structure and the Section 24H(3) basis for gearing, are in the Short Paper.
Figures for Funds 1 to 3 are closing statistics. Fund 4 figures are the current raise target; projects and MW deployed will populate as capital is drawn down and deployed.
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The acquisition of the Decentral portfolio aligns with our strategy to diversify our assets under management into high quality, well-managed solar assets with strong off-takers.
We highly recommend Decentral Energy for their proactive and efficient operation and maintenance services, consistently delivering competitive and timely support across our solar plants.
Every investment carries risk. These are the main risks in a Section 12B solar fund, and what Decentral does about each one. Full detail is in the short paper.
The risk:capital must be invested in qualifying solar assets before 28 February 2027 for the deduction to apply in that tax year.
How it's managed:Decentral deploys into its own project pipeline and guarantees the Section 12B deduction will be at least 222% of your investment.
The risk:SARS could challenge a deduction, or tax legislation could change.
How it's managed:the structure is supported by an independent tax opinion, available on request.
The risk:fund income depends on customers paying for the electricity they use.
How it's managed:every customer is subject to an independent credit check and review by Decentral's investment committee before a project is approved. Assets are then spread across many customers, sectors and provinces on long-term power purchase agreements, so no single customer drives returns.
The risk:solar systems could generate less energy than forecast.
How it's managed:Decentral provides asset management, operations and maintenance for every site, with ongoing performance monitoring.
The risk:priority profits are not guaranteed.
How it's managed:Decentral charges no upfront or annual fees, and earns its performance fee only after debt repayment and investor priority profits are paid in full.
The risk:this is a long-term investment over a 20-year term, and selling early can trigger a tax recoupment.
How it's managed:investors can request an exit (put option) after 5 years, and Decentral has a call option after 7 years, with further annual opportunities after that. Plan your holding period with your tax advisor.
As a limited partner, your liability is limited to the amount you invest. See the full risk disclaimer at the bottom of this page.
Three steps, with a minimum investment of R500,000.
Get the fact sheet and short paper, and share them with your tax or financial advisor.
Our team takes you through the fund terms and the subscription documents, including FICA.
Your capital is deployed into qualifying solar assets before the tax year closes.
Get in touch with our investor relations contacts directly, or send a general enquiry and we'll route it to the right person.
Request document
Tax opinion document is available on request, click here to contact our team.
Risk and compliance. Investments carry risk. Section 12B eligibility, and the availability and extent of any tax deduction, depend on applicable legislation, asset structure and individual investor circumstances. Investors should obtain independent tax, legal and financial advice before investing. This communication is not tax or investment advice.
Murray Kuiper, CFO of Decentral Energy, explains how Section 12B works, who it suits, and how Decentral Green Energy Fund 4 is structured.
This video is for information only and is not tax or investment advice.