As energy costs continue to rise with no end in sight, businesses have no option but to consider alternatives to Eskom. One of the most obvious solutions is solar. However, the key question is whether owning the solar system is the right option
An alternative to owning a solar system is entering into a Power Purchase Agreement (PPA), which effectively allows an energy consumer to access the benefits of solar energy without the upfront capital investment or ownership risk. Under a PPA, companies such as SunEx take on the responsibility of funding, designing, installing, operating, and maintaining the system, while the customer simply purchases the electricity generated, typically at a rate lower than Eskom.
This structure enables businesses to reduce energy costs, allocate capex elsewhere, improve cash flow, and avoid the complexities associated with owning and managing energy infrastructure. It also transfers performance, maintenance, and technology risk to the provider, allowing the customer to focus on its core operations while still benefiting from reliable, cleaner, and more predictable energy pricing.
The most significant benefit is that the customer will lock in upfront to an agreed tariff over a fixed period, typically ranging from 10 to 20 years.
This model allows organisations to access an alternative energy supply and an agreed cost with no uncertainty around future costs all whilst while avoiding the risks and costs associated with owning and operating the system.
Below I have set out several key benefits of not owning a solar system:
1. No Upfront Capital Investment
One of the most significant advantages of a PPA is that it requires zero upfront capital expenditure. The provider fully funds the installation, enabling businesses to preserve cash flow and allocate capital to core operational priorities rather than energy infrastructure.
2. Immediate Cost Savings
Electricity generated through a PPA is typically priced below prevailing utility tariffs. This allows clients to realise instant savings on their energy bills from day one, with protection against future tariff escalations.
3. Protection Against Rising Energy Costs
With utility tariffs increasing year-on-year, a PPA provides long-term price certainty. Tariffs are either fixed or escalated at predictable rates, allowing businesses to forecast energy costs accurately and hedge against volatility.
4. No Operational or Maintenance Risk
The provider takes full responsibility for the system’s performance, including; monitoring, maintenance, insurance and repairs.
This ensures that clients benefit from reliable energy generation without any operational burden or technical risk.
5. Enhanced Energy Security
In markets affected by grid instability and load reduction, a PPA provides greater energy independence. Solar generation reduces reliance on the grid and can be integrated with backup solutions, ensuring more consistent power supply.
6. Balance Sheet Advantages
Because the system is owned by the provider, it is typically treated as an off-balance sheet solution. This improves key financial ratios and avoids the need for debt financing associated with capital projects.
7. Scalable and Customised Solutions
PPAs are tailored to each client’s specific energy profile and operational requirements. Systems can be designed to:
Match consumption patterns
Optimise energy yield
Scale over time as demand grows
This flexibility ensures maximum efficiency and long-term value.
At SunEx we manage over 250 solar systems across the country and have built deep expertise in delivering fully managed PPA solutions to commercial and industrial clients. By partnering with SunEx, businesses can confidently transition to solar, reduce their reliance on Eskom, and lock in long-term energy savings without taking on the risks of ownership.
For more information, reach out to Jason Boustead at jasonb@sunex.co.za