Solar PV for businesses in the Western Cape

This industry brief by GreenCape provides guidance for businesses in the Western Cape on installing behind-the-meter (BTM) solar PV systems to reduce electricity costs and improve energy security. It details financial viability factors, pricing benchmarks for 2025/26, various financing models including Power Purchase Agreements (PPAs), and the role of municipal feed-in tariffs and national tax incentives in South Africa.

• 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 BTM 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 9.00 – R 13.50 per kWp for systems over 1 MWp, and R 13.50 – R 15.50 per kWp for systems under 100 kWp. Alternative configurations like carports (1.25 – 2.00 multiplier) or floating systems (1.50 – 1.75 multiplier) increase these costs relative to standard rooftop installations.
• Businesses can choose between asset ownership and pay-for-access models. Outright purchase or debt financing allows for high long-term returns and access to tax incentives, though it requires significant upfront capital. Power Purchase Agreements (PPAs) allow companies to avoid capital expenditure and O&M responsibilities by paying a third-party provider for power at a predetermined rate, typically over 10 to 25 years.
• Financial viability is influenced by several factors: installation size, technology choice (with a warning that South Africa lags in equipment compliance), location/orientation, the chosen financing model, and the daytime electricity tariff. Higher standard rates for time-of-use (TOU) tariffs increase the feasibility of solar PV.
• In the Western Cape, 19 out of 30 municipalities offer small-scale embedded generation (SSEG) feed-in tariffs, which allow businesses to earn from excess electricity via bill credits or direct payments. Additionally, wheeling is permitted in the City of Cape Town, George, and Swartland municipalities.
• National incentives and regulations impact the business case. Section 12B of the Income Tax Act allows 100% depreciation of solar PV assets under 1MW in the first financial year for owners. Furthermore, the Carbon Tax Act of 2019 and the Climate Change Act of 2024 (commenced March 2025) create a regulatory environment where solar PV can reduce a company's tax liability and help meet greenhouse gas reporting mandates.
• Renewable Energy Certificates (RECs) or green attributes can be sold separately from the electricity generated. However, this revenue is currently marginal in South Africa's voluntary market (often less than 5% of gross avoided cost), and selling them means the business can no longer claim the environmental benefits in its ESG framework.
• Key risks to the business case include changes in solar PV policy (such as prohibiting feed-in or increasing connection fees) and changes to TOU pricing models by Eskom that might reduce daytime tariffs. These risks can be mitigated by integrating Battery Energy Storage Systems (BESS) for energy arbitrage and load shifting.

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} }