Financing Options for Affordable Power Solutions
Start saving now on monthly electricity bills and get reliable power.
Financing Options for Affordable Power Solutions
Start saving now on monthly electricity bills and get reliable power.
Understanding Solar Finance, PPA's & Solar Subscription Options in South Africa
There are several ways to access a solar system without paying the full cost upfront. The key difference between a Power Purchase Agreement (PPA), rent-to-own, and a solar subscription is who owns the system, what you pay for, and whether ownership transfers to you.
Solar Payment Options for Residential Solar Users
What is Rent-to-Own Solar?
A rent-to-own solar arrangement lets a residential solar customer make regular monthly payments for a solar system over an agreed period, with ownership transferring to the customer once they complete the contractual payments. Unlike a standard subscription, the intention of a rent-to-own agreement is generally that the customer will eventually own the solar system. The exact repayment period, ownership transfer conditions, maintenance responsibilities and other terms depend on the agreement with the provider.
In simple terms: You pay monthly towards the solar system, with the intention of owning it once the agreement is completed.
Note: APS does not currently offer its own rent-to-own solar solutions. This definition is included to help customers understand how rent-to-own differs from solar finance and solar subscription options.
What is a Solar Subscription?
A solar subscription allows a customer to access a home solar system for a recurring monthly payment rather than purchasing the entire system upfront. The solar system is generally supplied under a service agreement, and ownership, maintenance, upgrades, contract length and end-of-term arrangements depend on the subscription provider's terms.
In simple terms: You pay a monthly fee to use the solar solution rather than buying the system upfront.
Affordable Power Solutions works with a specialist solar subscription partners and can assist qualifying customers in accessing a monthly subscription option.
Rent-to-Own vs. Subscription Models
Why Choose Rent-to-Own?
- Ownership in 5 Years: With rent-to-own solar solutions, you make five-year monthly payments, and then the system is yours.
- Cost Savings: Unlike subscription models, which require indefinite payments, rent-to-own solar systems ensure that payments stop after five years, leading to long-term savings.
Case Study: A Typical Home
Let's consider a home that spends R3,000 per month on electricity using Eskom rates of R1.50 per kWh (just an example, it can cost more or less depending on your municipality or if paying Eskom directly and what your current rates are). This equates to a monthly usage of 2,000 kWh.
Using an 8kW System: An 8kW solar system can produce around 1,200 kWh monthly, reducing reliance on Eskom.
Financial Comparison: Rent-to-Own vs. Subscription
- Rent-to-Own: Assuming a 50% immediate savings, the monthly cost would be R1,500. Over five years, the total cost would be R90,000.
- Subscription: Assuming a 20% immediate savings, the monthly cost would be R2,500. Over 25 years, the total cost would be R750,000.
Cumulative Cost Over System Lifetime
The chart below illustrates the cumulative cost comparison over the system's 25-year lifetime:
Key Takeaways
- Rent-to-Own: Significant savings after the ownership transfer point (5 years).
- Subscription: Continuous payments lead to higher long-term costs.
Get Solar for your Home Today!
Contact Affordable Power Solutions to discuss our flexible solar options for your home or businesses. Enjoy the benefits of lower energy costs and a reliable power supply without the burden of upfront capital or hidden expenses. Get in touch with our solar installation experts today to get started on your journey to more affordable and sustainable energy.
Finance Options for Commerical Solar Users
What is a Power Purchase Agreement (PPA)?
A Power Purchase Agreement, or PPA, is typically used by businesses. Under a PPA, the solar provider installs, owns and operates the solar energy system on the customer's property. The business does not purchase the solar system itself. Instead, it buys the electricity generated by the system at an agreed rate for a defined contract period. For business customers, this can provide access to solar power without the upfront capital cost of purchasing and installing the system, while potentially reducing and stabilising long-term electricity costs.
In simple terms: You do not buy the solar system. You buy the electricity it produces.
Commercial Solar Power That Reduces Energy Costs for South African Businesses
A Power Purchase Agreement (PPA) is a financial arrangement where Affordable Power Solutions installs, owns, and operates a comprehensive solar energy system on your business's property. You purchase the electricity the system generates at a predetermined rate, typically lower than your current utility rate, for a specified period.
Who Qualifies for a PPA?
Our PPAs are designed for businesses in every sector with a monthly electricity bill exceeding R30,000. This threshold ensures that your company can maximise the financial benefits of switching to a more cost-effective energy solution.
Benefits of a PPA with APS
- No Startup Capital Required: You don't need to invest any upfront capital. APS handles the costs of installation and maintenance.
- No Hidden Costs: The agreement is transparent, with no unexpected fees or charges.
- Immediate Savings: Start saving on your electricity bills from day one with guaranteed lower monthly payments.
- Reliable Energy Supply: Enjoy a consistent and reliable energy supply tailored to your business's solar needs.
Switching to Affordable Power Solusions as your alternative energy provider is as straightforward as changing your cell phone network. Our solar solutions team manages the entire process, ensuring a smooth transition without disrupting your business operations.
Case Study: A Business Spending R35,000 per Month on Electricity
Scenario Overview: A business spending R35,000 monthly on electricity can benefit significantly from switching to a Power Purchase Agreement (PPA) with APS, especially considering the average yearly increases in Eskom's pricing.
Eskom Rate Increase: Eskom's electricity rates in South Africa have been increasing by an average of 12% annually. This continual rise can heavily impact businesses reliant on Eskom for their energy needs[Eskom]
Annual Increase with PPAs: In contrast, PPAs in South Africa typically include a fixed or Consumer Price Index (CPI) linked price increase. The CPI in South Africa has averaged around 5% annually, making PPAs a more stable and predictable cost option for businesses [Renewable Energy Hub].
Financial Comparison: Eskom vs. APS PPA
Let's compare the cumulative costs over 25 years:
- Eskom: With an average 12% annual increase in electricity rates, the cost of electricity will rise substantially over time.
- APS PPA: Assuming a 30% savings on monthly electricity costs and a CPI-linked increase of 5% annually.
Cumulative Cost Over 25 Years
The chart below illustrates the cumulative cost comparison over 25 years:
Key Takeaways
- Eskom: Cumulative costs increase dramatically due to the annual rate hikes, leading to significantly higher long-term expenses.
- APS PPA: Fixed, lower monthly payments ensure substantial savings over time, providing financial stability and predictability.
Lifetime of the System
A PPA with APS offers immediate savings and protects your business from the escalating costs associated with Eskom's annual rate increases.
Get Solar for your Business Today!
If your business spends more than R30,000 monthly on electricity, contact Affordable Power Solutions to explore our commercial solar solutions. Enjoy lower energy costs and a reliable power supply for your business without the burden of escalating expenses.
FAQs About Solar Finance & Monthly Solar Subscriptions
Affordable Power Solutions can assist customers with solar financing options where appropriate. The available solution will depend on the type of system, customer requirements and the finance options available at the time.
Affordable Power Solutions does not directly operate a solar rental service. APS can, however, assist customers with suitable financing options and can provide access to a monthly solar subscription solution through a specialist partner.
A solar subscription allows qualifying customers to access a solar solution for a monthly payment rather than purchasing the full system upfront. The subscription arrangement is provided through an APS partner, with terms and eligibility depending on the solution offered.
Yes, depending on eligibility and the solution selected. APS can help customers explore financing or monthly subscription options that reduce the need for a large upfront solar investment.
Options may include third-party finance or a monthly solar subscription solution through an APS partner. The most suitable option will depend on your household energy requirements, system size, budget and eligibility.
APS can assist businesses with solar and energy financing solutions. For qualifying commercial customers, Power Purchase Agreement options may also be available depending on electricity usage and project requirements.
