How you pay for it
Installment Sale
Finance it, then own it. As with many high-value assets, your solar system can be financed by installment sale, with fixed payments over an agreed period. At the end of the term, ownership of the system is transferred to you, and the energy it produces is yours for the rest of its 25+ year life.
- Upfront capital
- Little or none
- Payments
- Fixed, over the term
- Ownership
- Transfers to you
- Typical term
- 3 to 7 years
How an installment sale works
An installment sale is asset finance, the same way many businesses and farms buy vehicles, tractors or production equipment. A bank or specialist financier pays for the solar system, and you repay the purchase price plus interest in fixed instalments over an agreed term. You have use of the system from the day it is commissioned, while the financier keeps title as security until the final instalment is paid. Ownership then passes to you.
Because the instalment is fixed, your finance cost is known for the whole term. Your electricity saving, on the other hand, grows as utility tariffs rise. Over time the saving tends to overtake the instalment, and once the term ends you keep the full saving for the remaining life of the system.
Unlike a PPA or a rental, the production risk sits with you: the instalment is due whether the system produces a little more or a little less in a given month. That is why the design matters. We size the system to your actual load profile so that the energy it produces is energy you use.
Who pays for what
With an installment sale you are the buyer from the start, so the responsibilities of ownership are yours, with the financier's security over the asset until it is paid off.
Installation
Funded by the financier and repaid by you through the instalments. Some lenders ask for a deposit; others finance the full amount.
Maintenance
Your responsibility as the purchaser. Most clients place the system on a SolarSkye preventative maintenance plan, which also protects the warranties and the lender's security.
Insurance
You insure the system, usually by adding it to your existing asset or property policy. Lenders normally require proof of cover for the term.
Monitoring
Remote monitoring is set up at commissioning, so you and our team can see production and spot faults early.
Installment sale and Section 12B
Section 12B of the Income Tax Act is an accelerated capital allowance for renewable energy assets used in a trade. As the law stands today, solar PV of up to 1 MW can be deducted in full in the year it is first brought into use, and larger PV systems over three years at 50%, 30% and 20%.
The allowance generally goes to the owner of the asset. The Act also extends it to a purchaser under an instalment credit agreement, which is the type of installment sale where the seller keeps ownership until the final payment. South African tax advisers commonly read this to mean the buyer can claim the allowance from the year of first use, even before ownership formally passes. Whether your particular finance agreement qualifies depends on how it is structured, and how much the allowance is worth depends on your own tax position.
Please confirm the treatment with your tax practitioner before relying on it. We can provide the system specification, costing and commissioning documents they will need.
What you need
For the financier
- Credit vetting of the business, usually including recent financial statements and bank statements
- Company or farm registration documents and the details of the signatories
- A deposit, where the lender asks for one
- Proof of insurance for the system once it is installed
For the design
- At least 12 months of electricity accounts, and metering data where it exists
- A roof, carport or land area we can assess for structure and solar exposure
- Ownership of the property, or the owner's consent if you lease it
- An idea of your backup needs, if battery storage is being considered
From consult to a running system
SolarSkye structures the solution and works with the finance arrangement that suits you, whether through your own bank or another lender.
- 01Consult & Site AuditWe analyse your accounts and load profile and assess the site, then confirm whether owning the system over a finance term makes sense for you.
- 02Solution Design & DiscussionWe design the system and give you a detailed quote, with the expected production and savings, so your financier and tax practitioner have what they need.
- 03Finance approvalYour lender completes its credit assessment and issues the installment sale agreement. We work with them on the documents and the payment milestones.
- 04Approvals & InstallationWe handle grid-connection approval and any registration required, then our in-house team installs.
- 05Inspections & CommissioningThe system is tested, certified and commissioned. This is the date it is brought into use, which matters for tax.
- 06Monitoring & MaintenanceMonitoring and preventative maintenance keep the system producing through the finance term and long after ownership passes to you.
Installment sale questions
How long is a typical term?
In the South African market solar installment sales commonly run over 3 to 7 years, and sometimes longer for larger plants. The term, interest rate and any deposit are set by the lender based on its assessment of your business.
Is the instalment lower than my electricity saving?
That depends on the system, the term and the interest rate. A longer term lowers the instalment, while a shorter term means you own the system outright sooner. Your quote will show the expected production and saving so you and your financier can weigh the options.
What happens at the end of the term?
Once the final instalment is paid, ownership of the system is transferred to you. There is no further payment for the system, and you keep the full saving for the rest of its working life, which can reasonably be expected to exceed 25 years.
How is this different from a rental?
With a rental you never own the system and the provider normally maintains it. With an installment sale you are the purchaser, you are responsible for maintenance and insurance, and the system becomes yours at the end.
Can I settle early?
Most installment sale agreements allow early settlement of the outstanding balance, subject to the lender's terms. Check the settlement conditions in your agreement.
Own your system without the upfront outlay
Share your electricity accounts with us. We will design the right system for your site and give you a detailed quote your financier and tax practitioner can work from.
Power On!