06 Dec The solar solution to Eskom: Banks and other lenders increasingly offering funding options
With loadshedding firmly on the agenda, and indefinitely, business and property owners must find solutions to keep the lights on, trade moving and production flowing. Buildings that are not equipped with alternative power face hours of lost productivity or sales when loadshedding kicks in, which drastically impacts their bottom line and that of tenants. Solar energy is the most accessible alternative power source in South Africa, to eliminate reliance on the Eskom grid.
The perception of solar energy is that it’s a very expensive installation to take on, particularly due to the initial costs, but fortunately funding institutions are increasingly funding solar, making it an economically viable decision for commercial, retail, and industrial businesses.
Typically, the funding of solar installation is over a three-year period. Loadshedding is predicted to continue for longer, so conceivably you could have installed, paid off and be paying less for reliable solar energy before Eskom is back at full capacity.
Roof rentals on the rise
Some solar providers are setting up shop on the rooftop of a company, renting the space and then selling back the solar energy to the tenants of the building. This trade agreement is usually based on the building strictly using the solar energy being generated on the rooftop. It also means the owner doesn’t assume the risk of owning the solar panels.
This type of agreement provides an additional revenue stream for landlords through the rental of the rooftop, which would’ve otherwise not been utilised at all. In addition, the solar energy cost per month can be passed to the tenant, which may be much lower than regular electricity.
A solar-powered property is considered a hot commodity compared to one that is strictly connected to the Eskom grid. It attracts tenants, as every business prefers consistent power.
It’s worth noting than in some industries, the cost of integrating solar can be cheaper if you require less storage capacity. For example, factories that mostly operate in daylight hours would likely be able to use up all the solar energy generated per day. A smaller commercial offering or one that operates primarily at night would likely need storage as they don’t require the daily amount of energy that the solar panels generate. They would need to purchase battery packs to store solar energy, which adds to the installation costs. But this is another reason why considering funding for solar makes a lot of sense, so that it’s not a huge upfront cost, no matter the size of the business.
An ESG-savvy option
There is also the link to improving Environmental, Social and Governance (ESG) factors for every business and investing in solar energy is arguably one of the best, pro-environment steps one can take. If you are considering how to most effectively tackle loadshedding, taking the step towards solar energy could really pay off, and soon.
Paragon has a wide network of funders, including outside of the mainstream banks with access to several renewable energy funds specifically for solar and green energy funding that is not typically available at banks.