The business case for solar PV in South Africa

The document argues that solar PV is a financially viable option for South African businesses, capable of reducing electricity costs by approximately 15% with payback periods between 3 and 12 years. It highlights that larger systems benefit from economies of scale, with capital costs for systems over 500 kWp falling below R10k per kWp. The brief also details various financial incentives, including tax benefits (12i and 12b) and VAT deductibility, and notes that the Western Cape is a leader in implementing regulations and feed-in tariffs for Small Scale Embedded Generation (SSEG).

• Solar PV installations in South Africa can reduce business electricity costs by about 15%, with systems typically paying for themselves within 3 to 12 years and providing free energy for nearly 15 years thereafter, given a total lifespan of approximately 21 years.
• The financial viability of solar PV is heavily influenced by economies of scale; larger systems are cheaper per kWp. Systems under 100 kWp cost approximately R15k per kWp, while those over 500 kWp cost less than R10k per kWp.
• Power Purchase Agreement (PPA) tariffs reached price parity with average Eskom tariffs in 2019 and are projected to continue decreasing through 2022.
• Several financial incentives support solar PV adoption in South Africa, including the 12i tax allowance for greenfield and brownfield investments, the 12b tax benefit allowing 100% accelerated depreciation in the first year (effectively a 28% discount), and VAT deductibility for registered entities.
• The Western Cape is the leading province for grid-connected solar PV, with 23 municipalities allowing Small Scale Embedded Generation (SSEG) and 18 offering feed-in tariffs. Approximately 45 local municipalities outside the Western Cape also have relevant regulations and tariffs.

APA

Strydom, J. (2020). The business case for solar PV in South Africa. GreenCape. https://greencape.co.za/assets/SOLAR_PV_INDUSTRY_BRIEF_web.pdf

Chicago

Strydom, Johan. The business case for solar PV in South Africa. GreenCape, 2020. https://greencape.co.za/assets/SOLAR_PV_INDUSTRY_BRIEF_web.pdf.

Wikipedia

{{cite report |last1=Strydom |first1=Johan |title=The business case for solar PV in South Africa |publisher=GreenCape |date=2020 |url=https://greencape.co.za/assets/SOLAR_PV_INDUSTRY_BRIEF_web.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{strydom2020business, author = {Strydom, Johan}, title = {{The business case for solar PV in South Africa}}, institution = {GreenCape}, year = {2020}, url = {https://greencape.co.za/assets/SOLAR_PV_INDUSTRY_BRIEF_web.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }