Financing & Incentives

There appears to be a new, solar “gold rush” taking place, with all the installations that are being commissioned around the world- South Africa is no exception, albeit a little “behind the times”. For many years, solar power was the domain of only a select few applications; from the International Space Station, to remote villages in rural China and Africa, to wealthy “eccentrics” who aspired to holistic living.

Those days have long since past and solar PV is now a mainstream, logical and cheap alternative to “dirty” utility power. In fact, many countries have granted incentives for the use of renewable energy, for the simple reason that, if encouraged on a large scale, the capital costs of a power generation plant will be substantially reduced as “critical mass” of the underlying technology is reached.

History has shown that, within a reasonable amount of time after the mass adoption of these new technologies, incentives are phased out and the industry is able to stand on its own, competitive feet.

The “critical mass” for solar PV has been reached on a global scale and South Africa is now an unwitting beneficiary. Along with the huge reductions in solar power costs, there are some specific initiatives in South Africa to encourage solar PV uptake:

Finance:

  • Self Finance

    Most customers prefer to self-finance PV projects, where they either have free capital or have well-established relationships with lenders.

  • DTI Finance

    MCEP (Manufacturing Competitiveness Enhancement Programme) grant funding is available for qualifying manufacturers.

  • Third Party Finance

    PPA (Power Purchase Agreements) and Solar Lease Agreements are in some cases available for our larger projects.

Incentives:

  • SARS

    • Accelerated Depreciation – (3 Years)
      50% in Year 1 : 30% in Year 2 : 20% in Year 3
    • Section 12L Allowance
      Deduction in respect of energy savings of 45c per kWh of energy efficiency/energy saved.

  • UN Clean Development Mechanism (CDM)

    South Africa is a Carbon Credit compliant country.