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

This report by GreenCape evaluates the financial and operational feasibility of installing solar photovoltaic (PV) systems on agricultural packhouses, using a modelled apple packhouse to demonstrate the business case. It highlights that the primary value of these systems comes from replacing expensive grid electricity during peak daytime demand—driven by cooling and packing activities—rather than selling excess power back to the grid. The analysis concludes that while large-scale systems are consistently profitable, smaller installations require favorable financing to be viable.

• Solar PV is highly suitable for packhouses because energy generation peaks during the day, aligning with the highest demand periods. Specifically, 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 systems (500 kWp) are financially feasible across all modelled scenarios. These systems, costing R8.1 million, can yield a net present value (NPV) between R0.5 million and R4.1 million and an internal rate of return (IRR) exceeding the 18% discount rate used in the study. Simple payback periods result in 8 to 13 years of 'free energy' after the system is paid off.
• Small-scale solar PV systems (≤10 kWp) are less viable due to a lack of economies of scale but can be profitable under specific financing conditions. They show a positive NPV only under favorable loan terms (10% interest) and have an IRR range of 11-21%. Once paid off, they provide 5 to 10 years of 'free energy'.
• The ability to feed electricity back into the grid is limited and varies by municipality. In the Western Cape, only specific municipalities such as the City of Cape Town and Swartland have approved feed-in tariffs and regulations in place, while others are still developing them. This limitation makes maximizing self-consumption of generated energy the primary driver of project feasibility.
• External financing and tax incentives are critical for unlocking the potential of solar PV. Performance-based contracting via Energy Service Companies (EScos) helps overcome capital constraints. Additionally, the 12B Income Tax Act No. 58 of 1962 allows for the full cost of solar PV installations under 1MWp to be depreciated in the first year, reducing taxable income.
• Solar PV installations provide environmental benefits that may offer future financial value through carbon taxes (proposed at R120 per tonne CO2e) and global market pressure for low-carbon products. For the modelled apple packhouse, a 500 kWp system would reduce annual CO2e emissions by approximately 35%.

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} }