Page 36 - Energize September 2021 HR

VIEWS AND OPINION

Funding the sun: Solar PV financing each month and over the lifetime of the
agreement,” Alheit adds.
options for industry and commerce daytime power and operate five to seven
Businesses that use large amounts of
days a week are likely to generate the highest
savings from this funding model.
Information from SolarAfrica While ownership of the solar system will
remain with the service provider until the
s years of mismanagement at energy end of the agreement, business owners have
utility Eskom results in continued the option to purchase the system during the
Apower outages and energy tariff term of the agreement.
increases across South Africa’s industrial Various exit options are available should
and manufacturing sectors, businesses are a business owner wish to end the agreement
increasingly looking to renewable energy earlier, while any damage to the solar system
alternatives to power their commercial will be fully covered by insurance.
operations.
Perhaps the most favoured alternative Fixed roof rental
to state-supplied power, rooftop solar Fixed roof rentals have become a favoured
photovoltaic (solar PV) systems are choice for the owners of commercial
progressively being considered the most shopping centres and strip malls, as a long-
readily accessible off-grid energy solution in term roof rental agreement monetises their
South Africa. Charl Alheit previously unused roof space.
According to the Department of Energy, The solar services provider pays a fixed
South Africa’s solar resource is one of the highest Power purchase agreements (PPAs) monthly payment to the property owner for
in the world, with an annual 24-hour global solar PPAs are a popular choice among commercial the use of the building’s roof space, which
radiation average of about 220 W/m . and industrial consumers, owing to the also produces solar energy for the property.
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When this is considered alongside the fact that the installation, operations and The property owner pays the solar
300% increase in domestic electricity prices maintenance of the system are fully covered services provider for the energy used
over the last thirteen years, the growing by the solar services provider. based on Nersa or municipal rates, while all
trend towards solar for businesses appears Most often, this funding mechanism other costs, such as system maintenance,
inevitable. includes insurance and performance operations and insurance, remain with the
According to renewable industry guarantees, with the biggest advantage being services provider.
organisation GreenCape, rooftop small-scale reduced electricity costs from day one.
embedded solar generation systems remain This allows business owners to enjoy Lease agreement/equipment rental
the dominant renewable energy technology in the benefits of clean energy from a solar Under a solar lease agreement, also known
South Africa due to price, technical maturity PV system installed at their premises, at no as an equipment rental, the installation,
and ease of implementation. upfront cost. maintenance and management of the solar
The installed capacity of solar PV rooftop “A PPA includes the installation of a panel and its components is paid for by the
systems in South Africa has increased from fully operating solar system but removes solar PV provider, while the business pays a
387 MWp in 2017 to approximately 1,35 GW in the hassle of having to maintain, monitor, fixed monthly lease payment for the duration
2020/21, it outlines. operate and clean the system for years to of the lease term.
On the back of such significant market come. Business owners can now enjoy solar The monthly payment is determined
growth, numerous financial mechanisms to energy and the savings it will generate with based on the estimated annual production of
fund larger commercial and industrial solar zero capital expenditure or operating risks,” the solar system.
PV installations and operations have emerged explains SolarAfrica’s chief investment officer, A lease agreement is unlike a PPA in that
in recent years, including Power Purchase Charl Alheit. the consumer pays a fixed monthly amount
Agreements (PPAs), fixed roof rentals, lease or Following the signing of a long-term rather than agreeing to purchase the power
rental agreements, upfront capital investment agreement, a solar tariff is billed monthly, generated by the system at a set price per
and bank financing options. based solely on the amount of energy the kilowatt-hour (kWh).
With the adoption of solar PV systems by business produces. This tariff increases “Unlike a PPA, your monthly solar lease
commercial and industrial businesses now annually at a fixed escalation, allowing agreement payments remain the same
mainstream, the most significant consideration businesses to accurately predict future throughout the year, and the risk associated
for these companies is selecting the most energy costs. with the volume of solar energy produced
appropriate funding option for their solar “This tariff is up to 40% cheaper than the and consumed resides with the property
project. national grid, providing significant savings owner,” Alheit says.

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