Solar funding, South Africa

There are three ways to fund solar. You can only use some of them.

Which ones depends on a single question — whether you will own the system — and most people are told to answer it last. Answering it first is what stops you spending three weeks on a grant you were never eligible for.

Find what you qualify for →

Two minutes, free, and non-binding. Every answer carries a route, including the ones that rule a programme out.

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What can you actually get?

Answer a few questions and see which grants, finance structures and tax positions are open to you — and which are closed, and why. Nothing is sent anywhere.

First: do you want to own the system?

This one question decides more than your industry does. Grants and the Section 12B allowance both require ownership.

What kind of business are you?

Answer the first two and the rest appears.

Grants, on balance sheet, or off balance sheet.

Grants & blended finance

Government and DFI money, part of it never repaid. The cheapest capital available and the slowest to arrive — months, a heavy document pack, and in the agricultural case one application per applicant, ever. You own the system and claim the tax allowance.

On balance sheet: asset finance

Asset finance or an instalment sale, at prime plus one to four, over three to seven years. Days to weeks rather than months. The plant sits on your balance sheet from day one, you own it, and the Section 12B allowance is yours on the full cost.

Off balance sheet: PPA, rent-to-own, rental, subscription

Somebody else owns the plant during the term and you pay for the output or the use of it. No capital, nothing on your balance sheet, no tax appetite required — and no allowance either, because the provider takes it. Always available, which is why it is the fallback for every grant exclusion.

The rule that decides it

If you do not own the system you cannot claim Section 12B, and you cannot receive an Agro Energy Fund or GTIP grant. All three require ownership. A PPA or rent-to-own is the trade: no capital, no tax claim.

Side by side, once.

	Grant + blended	Asset finance	PPA / rent-to-own
Upfront capital	Nil	Nil to 10% deposit	Nil
Non-repayable portion	30% to 90%, capped	None	None
Ownership	You, day one	You, day one	The provider
Section 12B claim	Yes, yours	Yes, yours	No — the provider claims it
Rate	Market related	Prime +1% to +4%	Embedded in the tariff
Time to funding	Months	Days to weeks	Weeks
Documentation	Heavy	Moderate	Light
Blocks a second application	Yes (AEF)	No	No
Best for	Capex-able, taxpaying	Owners who want the asset	No capex, no tax appetite, bodies corporate

Every product, defined once.

The same questions answered for each one, including the ones most sites leave out: what it excludes, whether it covers water, and who keeps the carbon.

Asset finance

A term loan against the plant. You own it, and you owe for it.

Term: 3 to 7 years
Rate: Prime +1% to +4%, set by covenant strength and term
Deposit: Nil to about 10%
Ownership: You, from day one
Time to funding: Days to weeks
Water as well as energy: Yes — boreholes, storage, filtration, treatment and reuse fund on the same facility
Tax: Section 12B: 100% of qualifying cost deducted in year one, up to 1MW. Water equipment is not a 12B asset and falls under ordinary capital allowances instead
Carbon / I-RECs: Yours. You own the plant, so the I-REC or carbon benefit is yours to keep or sell
Who qualifies: Any trading entity with the cash flow to service it and something to secure it against
Who it excludes: Entities with no balance sheet to lend against — bodies corporate and HOAs — and businesses with no taxable income, for whom the allowance is worth little

Worth knowing up front. Declined on security is not the same as declined on affordability. The first can be fixed with a guarantee; the second cannot.

Rental

You rent the plant. The funder owns it and maintains it.

Term: 3 to 7 years
Rate: Embedded in the rental — quoted as a rand figure, not a rate
Deposit: None
Ownership: The funder, for the whole term
Time to funding: Days to weeks
Water as well as energy: Yes, on the same basis as energy
Tax: No Section 12B — you do not own the asset. The rental is generally deductible as an operating expense instead
Carbon / I-RECs: Usually the funder, as owner. Worth asking for explicitly if it matters to you
Who qualifies: Businesses that cannot or do not want to carry the asset on the balance sheet, and anyone with no taxable income to point an allowance at
Who it excludes: Nothing structural — but it costs more in total than owning

Worth knowing up front. Maintenance sits with the funder for the term, which is worth real money on a remote site. Insurance does not — you arrange that yourself.

Rent-to-own

A rental that ends with the plant becoming yours.

Term: 3 to 7 years
Rate: Embedded in the instalment
Deposit: None
Ownership: The funder during the term, you after the buy-out
Time to funding: Days to weeks
Water as well as energy: Yes
Tax: No Section 12B during the term. The position changes at buy-out, when you become the owner of a depreciable asset
Carbon / I-RECs: The funder during the term, you after buy-out
Who qualifies: Anyone who wants ownership eventually but not the capital event now
Who it excludes: Nothing structural

Worth knowing up front. The buy-out is typically around 10%. At that moment maintenance becomes your problem and your tax position changes — model it before you get there.

PPA

You buy the electricity, not the system.

Term: 10 to 20 years
Rate: Embedded in the tariff, with an annual escalation
Deposit: None
Ownership: The provider, throughout
Time to funding: Weeks
Water as well as energy: Yes — the same structure exists for water as a Water Purchase Agreement, up to 10 years
Tax: No Section 12B for you. The provider owns the asset and claims it, which is part of how the tariff gets competitive. Your payments are deductible the way a municipal account is
Carbon / I-RECs: The provider, as owner
Who qualifies: Anyone with no capital, no tax appetite or no balance sheet — and bodies corporate, for whom it is usually the only workable structure
Who it excludes: Nothing structural, but it is the most expensive route across twenty years

Worth knowing up front. The escalation rate is the number that decides this deal. This market commonly runs 5% to 10% a year, and at 7% the payment roughly doubles over ten years. Get it in writing before you present it to anyone.

Subscription

One all-in monthly fee covering the system and its upkeep.

Term: 5 years
Rate: Embedded in the fee
Deposit: None
Ownership: The provider
Time to funding: Days to weeks
Water as well as energy: Not currently
Tax: No Section 12B. A household has no trade to deduct against in any case
Carbon / I-RECs: The provider
Who qualifies: Residential only
Who it excludes: Commercial and industrial sites

Home loan add-on

The system added to your existing bond.

Term: The remaining bond term
Rate: Prime +1% or better — the cheapest money available to a household, because the property secures it
Deposit: None
Ownership: You, from day one
Time to funding: Weeks — it goes through your own bank
Water as well as energy: Yes — boreholes and treatment can be included
Tax: None. Section 12B needs a trade to deduct against, and a household does not have one
Carbon / I-RECs: Yours, though residential volumes rarely justify certification
Who qualifies: Homeowners with a bond and available equity
Who it excludes: Tenants, and owners without bond capacity

Worth knowing up front. The lowest instalment is not the lowest cost. Spread over twenty remaining bond years, a cheap rate can still total more interest than a five-year facility at a higher one.

Agro Energy Fund (grant + loan)

Part grant that is never repaid, part Land Bank term loan, as one facility.

Term: 3, 5, 7 or 10 years, repaid monthly, quarterly, six-monthly or annually in arrears
Rate: Market related, set by Land Bank against its own cost of funds
Deposit: None — the grant takes the place of one
Ownership: You, from day one
Time to funding: Two to six months
Water as well as energy: No. It funds the energy asset only and cannot pay for irrigation infrastructure
Tax: Section 12B applies because you own the plant. Whether the grant portion reduces the deductible base is unresolved — we show it conservatively and label it unconfirmed
Carbon / I-RECs: Yours
Who qualifies: Commercial farmers with at least 80% of income from farming, on land they own or hold under a lease running at least as long as the loan
Who it excludes: Part-time farmers, government and SOE employees within a 24-month cooling period, politicians within 12 months, distressed producers, off-farm processors, refinancing of an existing system, and anyone who has already used another government energy programme

Worth knowing up front. One application per applicant, ever. Spend it on the right project rather than the first one — and note the grant percentage stops growing once the rand cap binds.

GTIP grant

A grant toward energy and water efficiency for graded tourism operators, after an IDC-funded audit.

Term: Not a loan — a grant, with a two-year implementation window
Rate: Not applicable
Deposit: You fund the balance above the grant
Ownership: You
Time to funding: Window-dependent, and no window is currently confirmed open
Water as well as energy: Yes — it is a resource efficiency programme, so solar water heaters, heat pumps and HVAC qualify alongside generation
Tax: Section 12B on the portion you own and pay for, subject to the same unresolved question about grant-funded cost
Carbon / I-RECs: Yours
Who qualifies: TGCSA-graded accommodation and conference venues. Scoring favours turnover below R5m and B-BBEE Level 1
Who it excludes: Tour operators outright, and ungraded accommodation

Worth knowing up front. R1m is the maximum GRANT, not the maximum project. The optimal project is around R1.1m, which at 90% draws the full grant; a larger project draws the same R1m at a collapsing percentage.

Tourism Transformation Fund

Grant capital alongside NEF debt or equity, for black-owned tourism enterprises.

Term: Set per transaction by the NEF
Rate: Set per transaction
Deposit: Transaction-dependent
Ownership: You
Time to funding: Months
Water as well as energy: Follows the underlying project
Tax: Section 12B on the portion you own
Carbon / I-RECs: Yours
Who qualifies: 51%+ black-owned tourism enterprises providing services directly to tourists
Who it excludes: Enterprises below the ownership threshold, and those not serving tourists directly

Blended Finance Scheme

Grant plus Land Bank loan for black agricultural producers.

Term: Set on assessment
Rate: Market related
Deposit: None
Ownership: You
Time to funding: We will not put a number on it — see the warning
Water as well as energy: Follows the underlying project
Tax: Section 12B on the portion you own
Carbon / I-RECs: Yours
Who qualifies: Black agricultural producers
Who it excludes: Non-agricultural applicants

Worth knowing up front. Parliament flagged funding shortages, delayed disbursements and over-commitment in June 2026 — roughly R1.5bn a year needed against R613m allocated for 2026/27. It is a real programme; be wary of anyone quoting you a timeline.

SEDFA finance

State small-business lending, with business support in the same application.

Term: Set on assessment
Rate: Concessionary, set on assessment
Deposit: Assessment-dependent
Ownership: You
Time to funding: 21-day target below R500,000, on a complete submission
Water as well as energy: Yes — it funds business needs, not a technology
Tax: Section 12B where the asset qualifies and you own it
Carbon / I-RECs: Yours
Who qualifies: Any SMME, any sector, R50,000 to R15,000,000
Who it excludes: Businesses that cannot service the facility — it runs a credit assessment like anybody else

Khula Credit Guarantee

Not a loan. A guarantee that stands in place of collateral with a partner lender.

Term: Follows the underlying facility
Rate: Follows the underlying facility
Deposit: Follows the underlying facility
Ownership: You
Time to funding: Follows the underlying facility
Water as well as energy: Follows the underlying facility
Tax: Follows the underlying facility
Carbon / I-RECs: Yours
Who qualifies: Any SMME declined for want of security rather than affordability
Who it excludes: Deals that fail on affordability — a guarantee does not improve cash flow

Worth knowing up front. If a lender declined you, find out in writing whether it was on security or on affordability; only the first is what a guarantee fixes.

NEF funds

Debt or equity for black-owned businesses, across startup, expansion and equity acquisition.

Term: Set per transaction
Rate: Set per transaction
Deposit: Transaction-dependent
Ownership: You, subject to the equity terms
Time to funding: Months
Water as well as energy: Yes — the NEF funds businesses, not technologies
Tax: Section 12B where the asset qualifies and you own it
Carbon / I-RECs: Yours
Who qualifies: Black-owned businesses, R250,000 to R75,000,000 across all funds and sectors
Who it excludes: Businesses below the ownership threshold for the specific fund

Section 12B fund structure

A fund takes the asset and the allowance; you take the output at a lower cost.

Term: Typically the fund’s investment horizon
Rate: Reflected in what you pay for the output
Deposit: None
Ownership: The fund
Time to funding: Weeks to months
Water as well as energy: No — the allowance is energy-specific, so the structure is too
Tax: The fund claims Section 12B, not you. That is the entire point of the structure
Carbon / I-RECs: The fund, as owner
Who qualifies: Commercial and industrial sites of a size a fund will take on
Who it excludes: Small sites, and anyone who wants to own the plant

Water finance / WPA

The same structures applied to water: buy the equipment, or buy the water it delivers.

Term: Up to 10 years
Rate: Embedded, or priced as ordinary asset finance if you are buying
Deposit: None on a Water Purchase Agreement
Ownership: You if financed, the funder under a Water Purchase Agreement
Time to funding: Days to weeks
Water as well as energy: This is the water route — boreholes, pumps, storage, reticulation, filtration, treatment, reverse osmosis, greywater and reuse
Tax: Not Section 12B. That is an energy allowance; water equipment falls under the ordinary capital allowance rules for plant and machinery
Carbon / I-RECs: Not applicable, though a reduced pumping load changes the energy side
Who qualifies: Any site where water supply or quality is a constraint — and it can be bundled with the generation that runs it
Who it excludes: It cannot be funded inside the Agro Energy Fund, which covers the energy asset only

Start with what you are.

Not with which fund you have heard of. Programmes come and go; what you are does not.

Homeowners

Solar for your home, financed

Compare every way to pay for the quote you already have. There is no government grant for a household — what there is, is a real difference between the structures, and it is worth more than the rebate everyone remembers.

Farmers & agribusiness

Solar funding for South African farms

Agriculture is the one sector with a live, open-ended government grant for on-farm energy. Here is what it pays, who it takes, and what to do if it will not take you.

Bodies corporate, HOAs & complexes

Why estates almost always end up on a PPA

Your levy already pays for electricity. This replaces part of that line item — with no capital, no special resolution, and no trustee liability.

Commercial, industrial & manufacturing

Funding for businesses with a real load

If you are energy-intensive, there are concessionary routes worth far more than a rate negotiation on ordinary asset finance. Some of them we are still confirming — and we will not quote you a rate we have not verified.

Lodges, guesthouses & hospitality

Tourism solar grants, and when to be ready

The Green Tourism Incentive Programme runs in application windows. We will not tell you it is open. What we will do is have your pack ready for the day it is.

Small & medium business

Funding for businesses below the bank’s radar

Two state-backed routes that between them cover most of what a small business is actually declined for — and one of them is chronically under-used.

Transformation funding

Funding for black-owned businesses

Several of these stack with the ordinary routes rather than replacing them. Worth mapping properly before you pick one.

Section 12B & VAT

The tax side, without the folklore

A lot of what is online about solar tax in South Africa is out of date, and some of it was never right. Here is the current position.

Or skip the reading — screen me →

Two minutes, free, and non-binding. Every answer carries a route, including the ones that rule a programme out.

Across Southern Africa

Built for deals that cross a border.

Your bank, in your country

Pick the deal’s country and the application pack follows that country’s configuration — ready for a bank submission there.

USD structures, regional reach

PPA and rental structures are available USD-denominated, and our PPA and rent-to-own lenders have funding availability across the region.

One platform, same flow

Quote in, financial proposal out, offers back — the funnel is identical wherever the site is.

South Africafull panel · ZARZambiabank pack · USD PPA & rentalNamibiabank pack · USD PPA & rentalLesothobank pack · USD PPA & rentalEswatinibank pack · USD PPA & rentalMozambiquebank pack · USD PPA & rentalZimbabwebank pack · USD PPA & rentalBotswanabank pack · USD PPA & rentalMalawibank pack · USD PPA & rental

Before you rely on any of this

ArkFlow is not accredited by, empanelled with, or appointed as an agent of Land Bank, the IDC, DALRRD, the Department of Tourism, SEDFA or the NEF. Government and DFI programmes are applied for by you. We help you prepare and submit; you remain the applicant.

ArkFlow is not a financial services provider and does not give financial advice, and is not a registered tax practitioner. Nothing on this page is a quote, an offer of finance, an approval, or a recommendation to enter into any credit agreement.

Programme terms, grant availability and application windows change without notice. Figures shown are indicative and depend on the administering institution’s own assessment and on funds available at the time. Where a programme runs in windows we will not describe it as open unless a current window is confirmed.