In comparison to mature solar energy markets such as Spain, Australia and Germany, the solar energy market in South Africa is a young one.
The barriers to entry to the Solar Energy market are well known:
- High upfront cost
- Uncertainty around maintenance
- Concern around maximising production
- Scepticism about real savings
In many instances Solar PV installations are sold as ‘the right thing to do’, as a contribution to ‘saving the planet’ and lastly as a means to save energy costs.
South Africans are an innovative bunch who, presented with a problem or barriers to market entry, will in most instances come up with a viable solution. And this Solar PV solution is one that cuts the costs of those businesses that make a hefty contribution to the job market.
Durban based, Energy Capital, through the use of Solar PV offer a unique solution to businesses seeking to reduce their energy costs without capital outlay. Energy Capital was established to facilitate the long term funding of renewable energy equipment for end users.
Under section 12J of the Income Tax Act individuals, companies and trusts can get a tax deduction if they invest in a venture capital company (VCC) that in turn invests in a qualifying small business for at least five years.
Using this venture capital tax incentive, Energy Capital, was earlier this year able to tap R2.6m from Broadreach Capital’s Harbour Energy 1 fund to bankroll the installation of a rooftop photovoltaic system for a business park in Pinetown, KwaZulu Natal. Energy Capital chief executive Doug Brazier says the funding created eight jobs, mainly of installers on site.
Investors generate a return by the company selling the power generated from each unit to clients. Funding for another 120 similar projects is planned.
In essence Energy Capital, through it’s national network of partners, will:
- Advise on Energy Efficiency measures at no cost
- Install a Solar PV system at no cost
- Enter into a Power Producers Agreement with the client
- Sell the power produced by the Solar PV system to the client at a cost lower than the client pays presently
- AND the agreement can be tailored in such a manner that the client can assume ownership and the FULL savings from the system after a negotiated time.
What are the conditions:
- The client must have available roof or other space of approximately 600 square meters
- Energy Capital will only install Solar PV systems of 75 Kw and larger
Through the use of this model Energy Capital has a vested interest in getting the maximum production out of the Solar PV System installed – minute by minute and day by day. In addition the client will have a number of years of no maintenance and monitoring concerns whilst enjoying significant savings.
Port Elizabeth representative Alan Straton, from Straton Solar, said; “In Nelson Mandela Bay the municipality is the only one countrywide that allows the production of grid-tie Solar on a one for one basis which makes the return on investment in Solar very attractive. In one fell swoop Energy Capital have changed the game by demonstrating that Solar is not only environmentally friendly but also cheap enough to make such a rental model work.”
Straton Solar is focused on one outcome – the complete eradication of your current electricity consumption account via optimum use of the Nelson Mandela Bay Metropolitan Municipality Feed-in Tariff scheme.
Now homeowners and business can benefit from installing a grid-tie rooftop solar system and exporting the generated Photo-Voltaic electricity to the grid. The generated PV energy helps the home owner to reduce and eventually eradicate all municipal or Eskom electricity bills.
Energy Capital has been established to facilitate the long term funding of renewable energy equipment for end users. The concept is to provide the service as a “fully funded energy management solution” using their existing energy usage profile as a guide. Energy Capital’s objective is to position renewable energy on a client’s premises at no nett cost increase to the client.
: Western Cape – MyPR Alan Straton