10 Reasons to consider solar power for your business
With ongoing load-shedding and further electricity rate hikes on the horizon, the business case for securing energy and managing costs has never been stronger.
Here’s how Solar Photovoltaic (PV) is leading the way in renewables:
1. Less red-tape
Government has removed the threshold for private electricity provision in South Africa by allowing businesses to generate power without requiring a licence. Businesses will only be required to register and comply with the technical and environment requirements.
As part of President Ramaphosa’s new power plan, the lengthy regulatory process for approving new energy projects will be reviewed and special legislation will be tabled in Parliament to expedite the approval of new projects, allowing businesses to commence their operations sooner.
2. Sunshine is abundant – and free
Most areas in South Africa average more than 2 500 hours of sunshine per year. And while increasing energy costs impact budgets and planning, the sun is always free. So once your Solar PV installation is up and running, apart from minimal maintenance expenses there are no monthly energy costs for the megawatts produced through solar.
3. Solar technology is improving and costs are decreasing
Over the past decade advances in solar technology have seen significant gains made in ‘conversion efficiency’ – the amount of power generated from a given amount of sunlight. Additionally, although current supply chain constraints and rand-dollar volatility are resulting in higher prices at present, the cost of solar PV has steadily decreased over years.
Incentives announced under South Africa’s power plan will further offset the cost for rooftop solar power installations. Businesses and households who install solar panels will benefit from Eskom’s pricing structure and rules, allowing them to sell excess power to the grid.
4. Good for the environment
Solar solutions decrease carbon footprints and with customers increasingly demanding that businesses be more environmentally responsible, solar PV installations help enterprises to meet that requirement.
5. Good longevity
If properly maintained, Solar PV systems have good longevity with quality panels lasting up to 20 and 30 years and batteries lasting between 5 and 15 years.
6. Solar PV is finance-friendly
Funding costly renewable energy projects cannot be done easily with an overdraft or traditional asset financing. Standard Bank has developed a tailor-made finance solution for renewable energy projects – factoring in suppliers, the regulatory environment, cashflow neutrality and return on investment periods.
7. Solar power is flexible and scalable
Businesses can choose from three types of Solar PV systems:
- A Grid-tied system essentially includes solar panels and an inverter, but not a backup solution. This means the system provides power while the sun is shining and will offset standard electricity usage during those times. During outages or load shedding, depending on what is permitted by the grid codes and how the inverters are configured, the system will shut off as well.
- Backup systems or hybrid systems, comprise solar panels, an inverter and a component of battery storage. This means businesses have access to power during loadshedding and outages – however, battery storage is costly, so businesses must consider downtime costs versus the additional expense of battery storage to determine whether a backup system is worthwhile from a cash-flow perspective. With the correct initial set-up, businesses should be able to scale up the system by adding additional battery storage as needed.
- Off-grid systems are the third option. Businesses with these systems are completely self-reliant, however, there is no safety net if the Solar PV system goes down and costs can become extremely high relative to the volume of battery storage required.
8. Tax incentives for businesses
The National Treasury introduced a new policy in 2016 to allow for depreciation of the full cost of a grid-tied solar PV system of less than 1 MW that is used for electricity generation by a business in the course of its operation. Essentially, this allows taxpayers to deduct the costs of a solar installation from their taxable income in the year of its commissioning – meaning you claim back the total cost (100%) of your solar installation.
9. Tax benefits for large carbon emitters
In 2019, the Carbon Tax Act was introduced into law. Solar PV will come to play an important role for large emitters as they seek to manage their carbon footprints, reduce their carbon tax burdens and appeal to environmentally-conscious consumers.
10. Solar installations need not be complex
Navigating the process of commercial Solar PV installations can be challenging – but with PowerPulse from Standard Bank, it doesn’t have to be. PowerPulse is a digital platform that connects businesses interested in solar PV solutions with reputable suppliers who can guide them through the entire process, and financing. PowerPulse is open to all companies operating in South Africa. Interested to learn more? PowerPulse is an innovative solution that is transforming the way we produce, deliver and consume energy in South Africa.
Interested to learn more?
PowerPulse is an innovative solution that is transforming the way we produce, deliver and consume energy in South Africa. For more information, please contact our Concierge team on [email protected]