Not sure how to pay for solar?

A PPA usually suits you if

• You want solar power without putting capital into equipment.
• Your business has a steady, sizeable power bill and roof or land space for a system.
• You can commit to a long agreement, since a PPA usually runs 10 years or more.
• You are fine with the funder, not your business, normally claiming Section 12B.

Buying (cash or rent to own) usually suits you better if

• You want to own the system in the end.
• You have the cash, or you qualify for rent to own over a term that suits you.
• You would rather pay for the system than pay for power each month for years.
• Your business has enough taxable profit to use a Section 12B write-off. Ask your tax adviser.

Not sure which one fits? A free energy assessment gives you a real system size, an equipment list and a payback time first. Then you choose with real numbers, not a guess.

Under Section 12B, the owner of a solar system, who brings it into use in their own business, can normally write off the cost. Only the owner can claim it, not a tenant or a customer who is simply using someone else's equipment. Ask your tax adviser how this applies to your contract.

For most business solar systems (there is a size limit, so ask your tax adviser), the full cost can be written off in the year the system is brought into use. The system does not have to be new. There was also an enhanced 125% allowance, Section 12BA, for new and unused systems. It ended on 28 February 2025 and was not renewed. Any system brought into use after that date uses the ordinary allowance above.

Who can claim it, route by route

• Cash: you can normally claim it, if your business owns the system and uses it in its own trade.
• PPA: the funder owns and runs the system and sells you the power it makes. So it is normally the funder, not your business, that can claim it.
• Rent to own: whether you or the finance provider can claim it depends on how your agreement is structured.
• Lease: not you, because you do not own the system. Under a plain lease, where you are the one using the system, the funder generally cannot claim it either. The old rule that let an owner claim while a tenant used the system was part of Section 12BA, which has ended.

Example only. South African company tax is currently 27%. A 100% Section 12B allowance can reduce a company's taxable income by the full cost of a qualifying system in year one. At 27% company tax, that can cut the tax bill by up to 27% of the qualifying cost. This only applies if the business owns the system, uses it in its own trade, and has enough taxable profit that year to use the deduction against. It lowers the tax you owe. It is not a cash refund.

None of this is tax advice. Every business is different, so ask your own tax adviser before you decide how to pay.

Many business power bills carry two charges. One is for the energy you use, in kWh. The other is a demand charge. It is billed on the highest half hour of use in the billing period, not on your total use. So cutting that peak half hour matters as much as cutting your overall use.

Some tariffs also change by time of day. Peak hours cost the most. Standard hours cost less. Off-peak hours, mostly late at night, cost the least. Some tariffs change by season too. Common Eskom business tariffs include Megaflex, Miniflex, and Business Rate or Nightsave Business.

Solar helps in the day. A battery can charge from your panels, or at cheaper hours. It then lets you use that stored power at your priciest hours, instead of the grid. That can lower your demand charge and what you pay at peak times, without changing how your business runs. See energy management for how this works. No room for panels at all? Wheeling brings solar power from another site to you over the grid.