Solar PV for businesses in the Western Cape

The document provides a guide for Western Cape businesses on adopting solar PV to reduce energy costs and carbon footprints. It details various financing models—including outright purchase, debt finance, and Power Purchase Agreements (PPAs)—and provides pricing benchmarks for 2025/26. The brief highlights the role of municipal feed-in tariffs and national tax incentives, while warning of risks related to changing utility tariff structures and policy shifts.

• The levelised cost of electricity (LCOE) for embedded solar PV in South Africa has fallen below many electricity tariffs since 2022, driven by lower global component costs and rising utility tariffs. In the Western Cape, there are approximately 790 MW of behind-the-meter solar PV installations, primarily consisting of rooftop and parking-lot systems.
• Pricing for embedded solar PV in 2025/26 varies by system size, with larger projects benefiting from economies of scale. Outright purchase costs range from R 13.50 – R 15.50 per kWp for systems under 100 kWp, dropping to R 9.00 – R 13.50 per kWp for systems over 1 MWp. Alternative configurations like floating solar or carports increase costs, with multipliers ranging from 1.25 to 2.00.
• Businesses can choose between asset ownership and pay-for-access models. Outright purchase or debt financing allows for higher long-term returns and access to tax incentives, with a modeled capital-funded project showing a simple payback of 6 years. Power Purchase Agreements (PPAs) eliminate upfront capital expenditure and O&M responsibilities, providing a predictable energy cost model typically lasting 10 to 25 years.
• Financial viability is supported by several incentives: Section 12B of the Income Tax Act allows 100% depreciation of solar PV assets under 1 MW in the first financial year for owners. Additionally, 19 of the 30 Western Cape municipalities offer small-scale embedded generation (SSEG) feed-in tariffs, allowing businesses to earn from excess electricity.
• The business case for solar PV faces risks from dynamic regulatory and tariff environments. Specifically, if Eskom reduces daytime (standard TOU) tariffs to accommodate more solar installations, the resulting electricity savings and financial viability of systems would decrease. Battery energy storage systems (BESS) are identified as a mitigation strategy to enable energy arbitrage and manage excess generation.
• Renewable Energy Certificates (RECs) allow businesses to separate and sell the environmental attributes of a solar PV system. However, this revenue is currently marginal in South Africa's voluntary market, often representing less than 5% of the gross avoided cost, and results in the owner losing the ability to claim the emissions reductions in their own ESG frameworks.

APA

GreenCape (n.d.). Solar PV for businesses in the Western Cape. https://greencape.co.za/wp-content/uploads/2026/03/GC-Industry-Brief-Solar-PV-industry-brief-LR.pdf

Chicago

GreenCape. Solar PV for businesses in the Western Cape. n.d. https://greencape.co.za/wp-content/uploads/2026/03/GC-Industry-Brief-Solar-PV-industry-brief-LR.pdf.

Wikipedia

{{cite report |author=GreenCape |title=Solar PV for businesses in the Western Cape |url=https://greencape.co.za/wp-content/uploads/2026/03/GC-Industry-Brief-Solar-PV-industry-brief-LR.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{greencapendsolar, author = {{GreenCape}}, title = {{Solar PV for businesses in the Western Cape}}, institution = {GreenCape}, url = {https://greencape.co.za/wp-content/uploads/2026/03/GC-Industry-Brief-Solar-PV-industry-brief-LR.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }