Financing
Four ways to pay. One decision: what works for your balance sheet?
The system design and the financing route need to be considered together. A good solar project should make sense technically and financially.
Compare the routes
Own the asset
Commercial Finance
A bank or specialist financier funds the system. You repay over a fixed term and own the asset.
See detailsHighest IRR
Cash purchase + Section 12B
Pay once and keep the full energy saving. Section 12B can materially improve the effective cost for qualifying taxpayers.
See detailsZero capex
Power Purchase Agreement
A third party owns and operates the system. You buy the solar power at an agreed tariff.
See detailsOperating expense
Lease
A fixed monthly lease payment for the system. Ownership remains with the lessor during the term.
See detailsSide by side
| Criterion | Commercial Finance | Cash purchase + Section 12B | Power Purchase Agreement | Lease |
|---|---|---|---|---|
| How it works | A bank or specialist solar financier funds the system. You repay over a fixed term and own the asset. | Your business pays the full system cost upfront from own capital. You own the asset outright. | A third party owns and operates the system. You buy the electricity it generates at an agreed tariff. | Your business leases the system for a fixed monthly fee. Ownership stays with the lessor during the term. |
| Typical contract term | 60-84 months | Permanent ownership; no contract term | 8-20 years | 5-10 years |
| Capital outlay | Zero to minimal upfront, with the possibility of a deposit | Full system cost upfront | Zero upfront | Zero to minimal upfront |
| Monthly impact | Repayment can be lower than the current electricity bill, creating a cash-flow-positive profile from month one. | No repayment after purchase. The full saving flows to the business once the system is commissioned. | You buy solar power at a fixed or escalating rate, usually below grid pricing at the start. | Lease payment plus any residual grid electricity cost. |
| Tax treatment (SA) | Section 12B depreciation may apply; loan interest is generally deductible. | Section 12B may allow a 100% year-one deduction for qualifying solar assets. | PPA payments are generally treated as operating expenses. | Lease payments are generally treated as operating expenses. |
| Best for | Businesses that want to preserve capital and still own the asset. | Businesses with capital available and a clear long-term view of the site. | Listed companies, tenants, property owners and businesses with strict capex rules. | Businesses prioritising operating-expense treatment and low upfront capital. |
| Trade-off | Finance approval and interest cost must be included in the model. | Capital is tied up in the system and cannot be used elsewhere. | You pay for access to the system rather than owning it from day one, with ownership or earlier buy-out options depending on the contract. | You pay for access to the system rather than owning it from day one, with ownership after the period. |
The system has exceeded initial performance projections, delivering better-than-anticipated yields - a result that speaks to both the accuracy of their modelling and the quality of their execution.
Let the model choose the route.
We compare the options against your bill, operating profile and ownership position.
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