South African businesses can get cheaper solar

There are a number of ways South African businesses can use to access affordable solar solutions and cut back on their electricity expenses.

On 28 February 2025, South Africa’s enhanced solar tax rebate, which enabled businesses to claim an upfront deduction of 125% of the cost of renewable energy installations, came to an end.

However, Probe Corporation CEO Frank Rovelli explained that solar and energy storage solutions remain accessible to businesses.

He said that businesses can successfully lower their operational costs, mitigate power outages, and secure long-term energy independence by taking a proactive and strategic approach.

The incentive was a temporary enhancement of the existing renewable energy tax incentive, Section 12B. This section still allows a 100% write-off of the asset’s cost in the first year of use for projects under 1 MW.

For projects over 1 MW, it allows accelerated depreciation over 3 years: 50% in year one, 30% in year two, and 20% in year three, offering considerable savings.

“Solar and energy storage solutions continue to deliver strong returns on investment,” Rovelli explained.

“With the right planning, businesses can access flexible financing options and scalable system designs that make the switch not only possible, but profitable in the long term.”

For businesses approaching a switch to renewable energy, Rovelli advised that there are specific measures they can take to make the process more affordable.

He said one of the first steps to a successful solar installation is understanding your current energy consumption. Optimising energy usage upfront allows businesses to build smaller, more cost-effective systems.

In this regard, Rovelli recommended conducting an energy analysis to pinpoint consumption patterns and inefficiencies.

“Simple measures like upgrading to energy-efficient equipment or scheduling usage-intensive tasks for off-peak times can result in tremendous savings even before solar panels are installed,” he said.

Load shifting and peak shaving analysis are strategies aimed at optimising energy usage and reducing costs by managing electricity consumption during peak periods as well as the maximum peak demand of a business.

“By integrating load analysis and tariff analysis, businesses can make informed decisions to minimise energy costs through strategies like load shifting, demand response programs and energy efficiency measures,” he explained.

The right financing

For many businesses, solar costs are an unaffordable expense. However, Rovelli urged businesses to explore flexible financing options to help achieve solar adoption.

Payment options, including rent-to-own agreements, fully funded Power Purchase Agreements (PPAs), and subscription models, can make the switch to solar energy more affordable.

“These financing tools are designed to ease the burden of upfront costs. By choosing the right financing strategy, businesses can start saving on energy bills almost immediately while spreading out payments for their solar systems over time,” he said.

Rovelli said businesses that may not have the resources for a complete solar installation upfront can also adopt a phased implementation strategy.

This allows businesses to start with a basic solar inverter and panel setup and then expand the system in stages as their energy needs grow or budgets allow.

These solutions can be done in a way that is scalable and allows for upgrades to be made in the future. This approach also has the upside of ensuring that businesses do not overinvest in capacity they don’t require yet.

Rovelli also stressed the importance of efficient energy storage, which he said is critical for businesses that want reliable power beyond daylight hours or during load-shedding.

Advanced battery systems help businesses store excess energy when the sun isn’t shining, avoiding costly peak-period grid charges.

“Energy storage is the linchpin of energy independence,” he explained. “It’s the difference between relying on the grid during outages and being completely self-sufficient.”

Probe also recommended containerised systems for businesses requiring mobile or plug-and-play solutions. These self-contained systems offer a cost-effective and reliable way to power sites in remote or challenging environments.

“Whether it’s powering a mining operation or a commercial office block, containerised solutions are versatile, efficient, and tailored to the specific demands of the location,” Rovelli said.

Compliance is key

Finally, Rovelli stressed that adopting solar energy requires regulatory compliance and adequate protection from an insurance provider.

While reputable companies will ensure that their installations meet all local requirements, like municipal registration and engineering sign-offs, some installers may neglect these duties.

Eskom has said that the registration process ensures that the solar systems do not compromise the safety and reliability of the national grid.

While businesses may be tempted to forego these costs to save money on their installation, doing so can have devastating consequences.

“There have been very unfortunate situations where businesses had a fire as a result of a poor quality installation from inferior installers,” energy expert Matthew Cruise told Newzroom Afrika earlier this year.

Cruise said that, in cases like this, businesses only realise too late that they won’t get any payout from their insurers, since there was no updated certificate of compliance (COC) or Small Scale Embedded Generators (SSEG) application.

Many households that decided to register their solar systems during the “grace period” earlier this year were left with costs of up to R50,000 for necessary infrastructural or safety improvements.

For businesses, Cruise said costs were even higher, especially where they hired un-reputable, “fly-by-night” installers who installed the solar system completely incorrectly.

Some of these installers placed solar panels facing the wrong direction or even created a potential fire hazard, for example. But now, these installers are “nowhere to be seen”.

Similarly, Rovelli advised businesses to update their coverage to include new solar investments. “While many insurers cover solar systems by default, you want to be sure your protections match your setup.”