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Financing

Various financing options exist for residential and business installations.

Residential

The following financing can be explored:

  • Personal loan from your bank

  • Credit card

  • Increase your home loan on your flexi bond

  • Register a bond on your property

  • Power purchase agreement PPA

  • Tax rebate of 25% of panel cost up to R15 000. The rebate is only available for solar PV panels, and not inverters or batteries.

  • City of Cape Town will now buy back electricity at R1.07 a kWh that you can feed back into the grid.

For a personal loan or credit card usage, contact your bank to arrange favorable terms.

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To increase your home loan, contact your bank to access your flexi bond. Arrange terms for this increase to be paid of in 5-7 years so the financing of your Solar PV system is not done over the entire term of your home loan.

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If you don't have a bond. Register a new bond on your home. Cost of registering a bond for R 100 000 is R 7500. Arrange favorable interest rate and 5-7 year term with your bank for repayment.

Power purchase agreement PPA

Financing through a power purchase agreement as offered by companies like Gosolr and Solar strong offers you to rent the PV solar installation for an indefinite period. Of all the options this should be the absolutely last resort to consider.

It is comparable to renting a car forever at and inflation increased rate every year. You don't take ownership of the system.
 

  • Upfront cost of the installation is not shared with client

  • Can't get any money back from feed into the electrical grid

  • No tax incentive

  • Rental paid is below savings from not using the grid electricity

  • If you do want to take ownership, it can only be done after 3 years at an 30% inflated price and a de-installation fee of up to R30 000

  • Difficulty on transfer of agreement upon the sale of the property or the unwillingness of the new owner to fulfill the contract.

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Business

Finance your solar PV system for your business through your bank on a 5-7 year plan.

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 Investors in PV projects below 1 MW are able to deduct 100% of the cost in the first year. Under the expanded incentive, businesses will be able to claim a 125% deduction in the first year for all renewable energy projects with no thresholds on generation capacity. The adjusted incentive will only be available for investments brought into use for the first time between 1 March 2023 and 28 February 2025.

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For a business with positive taxable income, the deduction will reduce its tax liability. For example, a renewable energy investment of R1 million would qualify for a deduction of R1.25 million. Using the current corporate tax rate, this deduction could reduce the corporate income tax liability of a company by R337,500 in the first year of operation.

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ABSA will finance your solar PV installation if you are in good standing with the bank. They settle the account directly with the installer in increments - from order to installation.

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Contact: Paige.Bowen@absa.africa

011-8461563

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