Solar photovoltaic (PV) systems on packhouses: the business case for an apple packhouse

The report argues that solar PV is highly suitable for packhouses because their peak energy demands for cooling and packing align with daytime solar generation. Through modelling an apple packhouse, the report finds that large-scale systems (500 kWp) are consistently profitable across various tariff and financing scenarios, while smaller systems (≤10 kWp) require favourable financing to be viable. It emphasizes that the primary value is derived from replacing expensive grid electricity rather than selling excess power back to the grid, which offers lower returns. The report also identifies regulatory hurdles, noting that feed-in tariffs are only available in specific Western Cape municipalities.

• Solar PV is particularly well-suited for packhouses because energy demand peaks during the day and summer, coinciding with maximum solar generation. Cooling accounts for 80% of energy needs and requires 30% more energy during the day, while the most energy-intensive activity, packing, also occurs during daylight hours.
• Large-scale solar PV installations (500 kWp) are financially feasible in all modelled scenarios. These systems can provide between 8 and 13 years of 'free energy' after the initial cost is recovered, with a net present value (NPV) ranging from R0.5 million to R4.1 million on an R8.1 million system, and an internal rate of return (IRR) exceeding the 18% discount rate.
• Small-scale solar PV systems (≤10 kWp) are only profitable under specific financing conditions. While they can offer 5 to 10 years of 'free energy' after payback, they only show a positive NPV under favourable loan terms (10% interest), with an IRR ranging from 11% to 21%.
• The business case for solar PV on packhouses is driven by the replacement of expensive grid electricity rather than the sale of excess energy. Selling electricity back to the grid typically yields a significantly lower return than the value of the electricity costs being replaced.
• Regulatory and tariff frameworks are critical barriers to adoption. Feeding electricity back into the grid is not permitted everywhere, particularly for low-voltage connections. In the Western Cape, only specific municipalities—such as the City of Cape Town, Swartland, and others listed in the report—have established or are developing feed-in tariffs.
• External financing and tax incentives can significantly improve the financial returns of solar PV projects. Performance-based contracting via Energy Service Companies (EScos) helps overcome capital constraints, and the 12B Income Tax Act allows for the full depreciation of systems under 1MWp in the first year of installation.
• Solar PV installations reduce the carbon footprint of fruit production. For a modelled 500 kWp system, this results in an approximate 35% annual reduction in CO2e. This is beneficial given the proposed carbon tax of R120 per tonne CO2e and global market pressure for low-carbon products.

APA

van Vuuren, P. F. J. (n.d.). Solar photovoltaic (PV) systems on packhouses: the business case for an apple packhouse. GreenCape. https://greencape.co.za/wp-content/uploads/2022/10/The-business-case-for-solar-PV-on-packhouses-final-3.pdf

Chicago

van Vuuren, Pieter Frederik Janse. Solar photovoltaic (PV) systems on packhouses: the business case for an apple packhouse. GreenCape, n.d. https://greencape.co.za/wp-content/uploads/2022/10/The-business-case-for-solar-PV-on-packhouses-final-3.pdf.

Wikipedia

{{cite report |last1=van Vuuren |first1=Pieter Frederik Janse |title=Solar photovoltaic (PV) systems on packhouses: the business case for an apple packhouse |publisher=GreenCape |url=https://greencape.co.za/wp-content/uploads/2022/10/The-business-case-for-solar-PV-on-packhouses-final-3.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{vanvuurenndsolar, author = {van Vuuren, Pieter Frederik Janse}, title = {{Solar photovoltaic (PV) systems on packhouses: the business case for an apple packhouse}}, institution = {GreenCape}, url = {https://greencape.co.za/wp-content/uploads/2022/10/The-business-case-for-solar-PV-on-packhouses-final-3.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }