Unique financing
If you're looking for a service provider to fund your solar energy project, there are several financial options available:
1. Cash Purchase If you have the cash, you can buy an entire solar energy system in a single payment. A solar energy system is an asset, buying one in cash will go on your balance sheet. You will have complete ownership an responsibility for the solar energy system.
2. Loan Purchase A bank or solar energy provider may finance a loan purchase. The customer only has to pay a deposit and periodic payments. A loan purchase provides the same benefits as a cash flow. It also comes with the same disadvantages of a cash purchase, along with having a negative effect on your credit rating and potentially losing assets the business lists as security.
3. Power Purchase Agreement (PPA) A PPA is an agreement between a solar service provider and the customer. The solar service provider will install the solar energy system on the customer's property, and the custormer will only pay for the electricity they use from the system. You don't pay for the solarmodule, the panel mounting, the monitoring system, maintenance or insurance of solar plant. You pay a predetermined rate, wich the clients credit score will determine. The solar energy system belongs to the solar service provider, not the customer. So it doesn't reflect on your balance sheet. Other options also available on the B12 Tax break announced by goverment, ending 28 Feb. 2025
A CAPEX free agreement where a third-party is involved financing the solar installation and then selling the energy produced back to the business at a lower rate than traditionally utility costs.
With solar panels capable of generating electricity for decades with minimal maintenance costs, homeowners and businesses can enjoy significant savings on their energy expenses, effectively hedging against rising utility rates and volatile energy markets.
Solarflare would like the opportunity to give you more information on how these agreements work or how it can benefit your business.
Power Purchase Agreements (PPA's)
Power Purchase Agreement (PPA) or electricity power agreement, is a long-term contract between an electricity generator and a customer, usually a utility, government or company. PPA's may last anywhere between 5 and 20 years, during which time the power purchaser buys energy at a pre-negotiated price.
Certainly! Purchasing a solar system for your business can have various financial pros and cons. Here's a breakdown to help
you weigh the cost and benefits.
Pros:
1. Energy Cost Savings:
By generating your won solar power, you can significantly reduce or even eliminate electricity bills, leading to long-term cost saving.
2. Tax Incentives:
Many governments offer tax incentives, rebates, or grants for businesses investing in renewable energy, which can offset the initial cost of purchasing and installing the solar system. B12 Tax incentive announced by ZAR government.
3. Depreciation Benefits:
In some regions, businesses can take advantage of accelerated depreciation schedules for solar assets, providing additional tax benefits over time.
4. Fixed Energy Costs:
With a solar system, you can lock in your energy costs, providing stability and protection against future utility price increases.
5. Marketing and PR Opportunities:
Demonstrating a commitment to sustainability can enhance your brand image and attract environmentally-conscious customers and partners.
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Cons:
1. High Initial Cost:
The upfront investment required to purchase and install a solar system can be significant, which may strain your business's finances in the short term.
2. Maintenance Cost:
While solar panels have minimal maintenance requirements, there may still be costs associated with repairs, cleaning, and monitoring to ensure optimal performance.
3. Long Payback Period:
Depending on factors such as system size, energy usage, and incentives, the payback period for a solar investment may be several years, delaying the realization of savings.
4. Technology Risks:
Like any technology, solar panels are subject to wear and degradation over time, and there's a risk that advancements in solar technology could outpace tour system's efficiency.
5. Property Ownership Considerations:
If your business leases its property, you'll need to consider how purchasing a solar system affects your lease agreement and whether you'll be able to recoup your investment if you relocate.
Contact
I'm always looking for new and exciting opportunities. Let's connect.
Karen Basson +27 82 458 9292