The Mpumalanga Green Cluster Agency says South Africa ranks as one of the top 15 nations in the world in driving the green growth agenda – ahead of Australia, Singapore, and Finland.
The agency attributes the drive to the range of funding solutions and tax incentives available to green technology manufacturers and service companies and those who use or procure such goods and services.
Many of the financial investment houses and banks in South Africa offer special rates to their clients for investing in renewable energy assets as part of their sustainability drives.
GreenCape is a non-profit organisation that assists businesses by removing barriers to their establishment and growth. Although it is based in Cape Town it consults throughout South Africa and produces research and market intelligence information, including news on funding and incentives that are available from:
- GreenCapes’s green finance database on its website www.green-cape.co.za
- Government funding and incentives database downloadable from GreenCape’s website
- Finfind database: www.finfindeasy.co.za
- AlliedCrowds database: the website www.alliedcrowds.com is the first complete aggregator and directory of alternative finance providers in developing countries.
Nadia Rossouw of Infoled which is contracted to Build Africa Energy, says the return on investment of solar PV systems can be higher than returns on leaving money in the bank. “In the case of bank-funded solar systems (typically 80/20), the ROI should be within one year. The savings generated throughout that year should exceed the initial loan deposit amount within 12 months,” she explains.
Tax incentives such as the Section 12B incentive permit the system owner to fully depreciate the solar system within the first year of installation. Thus, profitable businesses investing in a solar plant can reap the tax benefits in year one instead of asset depreciation over three to five years.
The cost of solar is calculated in Rands per Watt installed, weighed against the predicted annual generation in kilowatt-hours. This calculation also considers maintenance costs and Eskom increases, tax incentives, and the tax implications of energy savings on cash flow.
Sources: Mpumalanga Renewable Energy and Sustainable Mobility Market Intelligence Opportunity Brief 2021, and case studies by Build Africa Energy