Financing Rooftop Small Scale Embedded Generation

The document outlines the financial landscape for rooftop solar PV in South Africa's commercial and industrial (C&I) sectors. It highlights that while high upfront costs are a perceived barrier, a variety of funding options exist, including traditional commercial bank loans, Power Purchase Agreements (PPAs), and emerging models like Property Assessed Clean Energy (PACE) and Pay As You Save (PAYS). It also details specific tax incentives and grants available to reduce the cost of solar installations.

• Rooftop solar PV is the primary technology for small scale embedded generation (SSEG) in South Africa due to its technical maturity and cost-effectiveness. In 2020/21, installed capacity reached approximately 1.35 GW, with 250 MWp to 400 MWp installed in the preceding 12 months. The typical payback period for these systems is between 3 and 8 years, while the systems themselves can last over 20 years.
• Major South African commercial banks (ABSA, FNB, Nedbank, and Standard Bank) offer various funding instruments for solar PV, including term loans, asset and property finance, and installment sales agreements. These banks often require security against the underlying property or asset, though some unsecured funding may be available. Many banks prefer installers with SAPVIA PV Green Card accreditation.
• Several innovative and alternative financing models are available or being tested in the South African market: Power Purchase Agreements (PPAs) allow businesses to purchase electricity at a predetermined rate with zero upfront costs; online impact investing platforms (such as The Sun Exchange and FedGroup Ventures) enable crowdfunding of panels; and Property Assessed Clean Energy (PACE) and Pay As You Save (PAYS) are identified as mechanisms for low-cost, long-term funding, though PAYS is noted as the least developed of the three in South Africa.
• Various financial incentives exist to lower the cost of solar PV for businesses, including a 100% accelerated depreciation tax benefit (12b) which acts as a 28% discount, VAT deductibility for registered entities, and the Green Tourism Incentive Programme, which provides grants up to R1,000,000 for small and micro tourism businesses.

APA

Poorun, A., & Radmore, J. (2021). Financing Rooftop Small Scale Embedded Generation. GreenCape. https://greencape.co.za/wp-content/uploads/2022/10/ENERGY_FINANCE_INDUSTRY_BRIEF_8_3_21-3.pdf

Chicago

Poorun, Argon, and Jack Radmore. Financing Rooftop Small Scale Embedded Generation. GreenCape, 2021. https://greencape.co.za/wp-content/uploads/2022/10/ENERGY_FINANCE_INDUSTRY_BRIEF_8_3_21-3.pdf.

Wikipedia

{{cite report |last1=Poorun |first1=Argon |last2=Radmore |first2=Jack |title=Financing Rooftop Small Scale Embedded Generation |publisher=GreenCape |date=2021 |url=https://greencape.co.za/wp-content/uploads/2022/10/ENERGY_FINANCE_INDUSTRY_BRIEF_8_3_21-3.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{poorun2021financing, author = {Poorun, Argon and Radmore, Jack}, title = {{Financing Rooftop Small Scale Embedded Generation}}, institution = {GreenCape}, year = {2021}, url = {https://greencape.co.za/wp-content/uploads/2022/10/ENERGY_FINANCE_INDUSTRY_BRIEF_8_3_21-3.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }