Financing Rooftop Solar PV

The document identifies that while high upfront capital costs limit the uptake of rooftop solar PV, several innovative green finance options exist for South African businesses. These include commercial bank funding (asset finance, term loans), Property Assessed Clean Energy (PACE), Pay As You Save (PAYS), power purchase agreements (PPAs), and online impact investing platforms. It highlights that solar PV is technically mature, with payback periods typically between 3-8 years and a lifespan of up to 20 years. The brief also details specific offerings from banks like Absa, Nedbank, Standard Bank, and FNB, and lists tax and grant incentives such as 100% accelerated depreciation and the Green Tourism Incentive Programme.

• Rooftop solar PV is technically mature and affordable for businesses, with typical payback periods ranging from 3 to 8 years and a system lifespan of up to 20 years.
• In South Africa, solar PV adoption is growing; nearly 200MW of modules were sold or installed in 2018, and installed capacity could have exceeded 1 GWp in 2019 due to continued load shedding.
• Several innovative financial mechanisms exist to eliminate upfront costs for systems under 1 MW, including Property Assessed Clean Energy (PACE), where costs are repaid via property tax bills, and Pay As You Save (PAYS), where municipalities fund upgrades and recoup costs through monthly bills.
• Commercial banks provide various debt solutions for solar PV, such as instalment sale loans and medium-term loans, often with tenures up to 10 years. Absa focuses on projects up to 1 MW, while Standard Bank typically finances projects up to 999 kWp, with some banks considering funding up to 100% of installation costs.
• Power Purchase Agreements (PPAs) are long-term contracts that allow businesses to purchase electricity at a predetermined rate with zero upfront costs, as the developer handles design, construction, and maintenance.
• Online impact investing and crowdfunding platforms, such as The Sun Exchange and FedGroup Ventures (Impact Farming), allow individuals to buy solar panels that are then rented to businesses.
• Businesses can access several financial incentives for solar PV, including a 100% accelerated depreciation tax benefit (12b) which acts as a 28% discount, VAT deductibility for registered entities, and grants up to R1m for small tourism businesses via the Green Tourism Incentive Programme.

APA

Muringathuparambil, R., & Radmore, J. (2019). Financing Rooftop Solar PV. GreenCape. https://greencape.co.za/wp-content/uploads/2022/10/GC-Finance-Brief-v7-WEB-3.pdf

Chicago

Muringathuparambil, Reshmi, and Jack Radmore. Financing Rooftop Solar PV. GreenCape, 2019. https://greencape.co.za/wp-content/uploads/2022/10/GC-Finance-Brief-v7-WEB-3.pdf.

Wikipedia

{{cite report |last1=Muringathuparambil |first1=Reshmi |last2=Radmore |first2=Jack |title=Financing Rooftop Solar PV |publisher=GreenCape |date=2019 |url=https://greencape.co.za/wp-content/uploads/2022/10/GC-Finance-Brief-v7-WEB-3.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{muringathuparambil2019financing, author = {Muringathuparambil, Reshmi and Radmore, Jack}, title = {{Financing Rooftop Solar PV}}, institution = {GreenCape}, year = {2019}, url = {https://greencape.co.za/wp-content/uploads/2022/10/GC-Finance-Brief-v7-WEB-3.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }