Financing options and solar ROI
Option 1: Buy the system
If you’ve got the capital outlay to buy your own solar installation, then more power to you! It’s worth the investment to get your business independent from the grid during daylight hours.
Should you buy the solar system you are allowed to depreciate the renewable energy project in ONE year. This equates to 28% saving on the purchase cost.
(Section 12b of the Income Tax Act)
The below graph shows an example payback period for a company investing R473 000 (after tax deductions), which resulted in an 80% reduction on their monthly electricity bill of R20 000.
The payback period is usually 3-4 years and the internal rate of return (IRR) around 25%.