Industry Brief: Financing Rooftop Solar PV
Mar 7, 2021
GreenCape has published a new industry brief titled "Financing Rooftop Small Scale Embedded Generation: Unlocking the energy potential for your business through innovative green finance".
The average standard Eskom tariffs have risen by almost 300% since 2007. This increasing cost, combined with the continued risk of load shedding, has meant that a number of businesses are transitioning to small scale embedded generation (SSEG) to meet their energy needs.
Rooftop Solar Photovoltaic (solar PV) systems remain the dominate technology in South Africa due to price, technical maturity and ease of implementation. As a result, in 2020/21 the solar PV installed capacity rose to approximately 1.35 GW with between 250 MWp and 400 MWp of solar PV having been installed in South Africa in the last 12 months.
Despite the increased uncertainty related to the systemic shocks of national load shedding and the COVID-19 pandemic, the final business case for solar PV remains consistently strong. The payback period for most systems is between 3-8 years1. Thereafter, businesses are making savings on electricity costs with systems lasting for more than 20 years.
On the back of this market growth, there are numerous financial mechanisms for commercial and industrial businesses to finance solar PV and other systems of under 1 MW.
Financial institutions have had sufficient time to gauge the risk and opportunities in the South African energy transition. Many have now set up dedicated divisions with capacity to assist clients by structuring innovative finance deals to meet their energy needs. In particular, solar PV is an affordable and stable asset which is readily financed with the support of industry mechanisms such as the PV GreenCard supplier certification.
To access the full industry brief, click here.