---
title: "Commercial solar payback in South Africa: worked examples"
description: "How long commercial solar takes to pay back on a business tariff, with worked examples, and the factors that shorten it: daytime use, demand and tax."
image: https://cleanvolts.co.za/hubfs/commercial-solar-payback-featured.png
---

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![Factory with rows of solar panels on its metal roof in a Gauteng industrial area](https://cleanvolts.co.za/hs-fs/hubfs/commercial-solar-payback-featured.png?width=1200&height=630&name=commercial-solar-payback-featured.png)

# Commercial solar payback in South Africa: worked examples

![Tony Lopes](https://cleanvolts.co.za/hs-fs/hubfs/clean%20volts%20launch%20post.png?width=48&height=48&name=clean%20volts%20launch%20post.png)

 Tony Lopes

November 6, 2026

**Short answer:** Payback is the installed cost divided by what the system saves each year. A business that uses most of its solar power on site, on a business tariff of around R2.50 a kWh, can often expect a grid-tied system to pay back in roughly three to five years before tax. Section 12B, daytime self-use and yearly tariff increases all shorten it. Batteries usually lengthen it.

*Last updated November 2026. Tariffs checked November 2026.*

Every installer's proposal ends with a payback figure, and they rarely agree. That's not always because someone is stretching the truth. Payback depends on a handful of assumptions, and a small change in any of them moves the answer by a year or more. This guide shows the formula, works through two examples with every assumption stated, and lists what to check before you trust anyone's number, including ours. For an overview of what a system involves, see [commercial solar for businesses](https://cleanvolts.co.za/solar-for-business).

## **How long does commercial solar take to pay for itself in South Africa?**

Simple payback uses one formula:

**Payback in years = (installed cost − tax benefit) ÷ (yearly savings − yearly maintenance)**

Yearly savings is the number that needs the most care. It is the units of solar power you actually use on site, multiplied by what each of those units would have cost you from Eskom or the municipality, plus any demand charge or diesel you avoid. Power that you produce but can't use, or export at a low credit, saves very little.

## **What does a worked example look like?**

These two examples use round numbers so you can follow the working. They are illustrations, not quotes. Your own figures will differ, which is the point of asking installers to show their calculation.

### **Example 1: a warehouse with a 100 kWp grid-tied system**

| Assumption or step | Figure |
| --- | --- |
| Installed cost (no battery, excl. VAT) | R11,000 per kWp, so R1.1 million |
| Yearly production in Gauteng | 100 kWp × 4.5 kWh × 365 days = about 164,000 kWh |
| Share used on site (open weekdays and Saturday mornings) | 90%, so about 148,000 kWh |
| Average cost of a daytime unit, all-in (excl. VAT) | R2.50 |
| Yearly savings | About R370,000 |
| Maintenance and cleaning (about 1% of cost) | About R11,000 a year |
| **Payback before tax** | **R1.1m ÷ R359,000 = about 3.1 years** |
| Section 12B: 100% deduction × 27% company tax | About R297,000 less tax in year one |
| **Payback after tax benefit** | **R803,000 ÷ R359,000 = about 2.2 years** |

Now change one assumption. If the warehouse closes at 14:00 and is shut on weekends, only about 60% of the solar is used on site. Savings drop to about R246,000 a year and payback before tax stretches to about 4.7 years. Same roof, same panels, very different answer. That's why self-use is the first number to question.

### **Example 2: a factory adding a battery**

| Assumption or step | Figure |
| --- | --- |
| Solar: 300 kWp at R10,000 per kWp | R3.0 million |
| Battery: 200 kWh at R6,000 per kWh | R1.2 million |
| Solar used on site (85%) × R2.50 | About R1.05 million a year |
| Lower demand charge and generator diesel | About R200,000 a year |
| Maintenance | About R42,000 a year |
| **Payback before tax** | **R4.2m ÷ R1.21m = about 3.5 years** |
| Solar only, for comparison | R3.0m ÷ R1.02m = about 2.9 years |

The battery adds cost faster than it adds savings, so payback gets longer. It can still be the right call, if a stoppage costs more than the battery, or if peak-time demand charges are high. But it should be justified on those grounds, not slipped into the same payback figure.

## **What shortens commercial solar payback?**

- **High daytime self-use.** Businesses that run machines, cooling or offices through the working day use almost every unit the panels make.
- **Expensive daytime units.** On Eskom's time-of-use tariffs, the morning peak (two hours) and the busy standard periods cost far more than off-peak units, especially from June to August. Solar that covers those hours is worth more.
- **Section 12B.** A 100% first-year deduction for systems up to 1 MW brings forward a tax saving worth about a quarter of the cost for a company paying 27% tax.
- **Yearly tariff increases.** Eskom's direct tariffs rose about 8.8% in April 2026, and another increase is approved for April 2027. Every increase makes each solar unit worth more, so later years pay back faster than year one.
- **Cutting diesel.** Generator hours avoided are often the fastest money back.

## **What makes payback longer than the proposal says?**

- **Oversizing.** A system sized to the roof rather than to the daytime load produces power nobody uses.
- **Counting fixed charges as savings.** Network, service and admin charges stay on the bill whatever the panels do.
- **Assuming demand charges fall.** If your highest demand happens on a cloudy day or after 17:00, solar alone won't reduce it.
- **Leaving out maintenance, insurance and inverter replacement.** Inverters often need replacing once in a system's 25-year life.
- **Roof work.** If the roof must be repaired or reinforced first, that cost belongs in the payback too.

Our guide to [solar for warehouses and factories](https://cleanvolts.co.za/guides/solar-for-warehouses-factories) covers roofs, sizing and the paperwork in more detail, and [what a solar quote should contain](https://cleanvolts.co.za/guides/what-a-solar-quote-should-contain) shows how to compare proposals line by line.

## **What should you ask an installer to show you?**

1. The yearly production estimate, and the yield per kWp it assumes.
2. The share used on site, worked out from your meter's half-hourly or hourly data.
3. The rate per unit used for savings, split by time-of-use period if you are on one.
4. Which charges on the bill they expect to fall, and which won't.
5. Payback with and without Section 12B, and with and without any battery.
6. Maintenance, insurance and inverter replacement over 10 years.

**Before you sign**

- **Check the tax position with your accountant.** Section 12B depends on ownership, use in your trade and the date the system is brought into use. This guide isn't tax advice.
- **Get the roof checked.** Larger systems need a structural engineer's sign-off.
- **Make sure the installer is registered.** The system needs a Certificate of Compliance and grid approval before it's connected.

## **Frequently Asked Questions**

### **Does a battery lengthen payback?**

Usually, yes. Batteries cost more per rand of savings than panels do, so they stretch the overall payback. They earn their place where stoppages are expensive, where peak demand charges are high, or where they cut generator use.

### **How does Section 12B affect payback?**

It lets a business deduct 100% of a qualifying solar system of up to 1 MW in the year it is brought into use. For a company paying 27% tax, that's a saving of roughly a quarter of the cost, which typically cuts payback by about a year. Confirm the details with your accountant.

### **What savings can a business expect per month?**

As a rough guide, each kWp of panels used fully on site saves about R300 to R350 a month at R2.50 a unit. A 100 kWp system on a busy weekday site can save around R30,000 a month. Your bills and meter data give the real figure.

## **Where We Fit In**

CleanVolts matches businesses with vetted, registered [CleanVolts Approved](https://cleanvolts.co.za/cleanvolts-approved) commercial installers. Send us your bills and we'll help you put together the information installers need, so their payback figures are built on your real use and can be compared side by side. You contract the installer directly and they design, install and sign off the system. Using CleanVolts costs you nothing, and if the installer pays us a referral fee, we tell you up front.

[**Send your business electricity bills**](https://cleanvolts.co.za/business-solar-enquiry) · [Solar for business](https://cleanvolts.co.za/solar-for-business)

*Sources: [Eskom tariff booklet 2026/27](https://www.eskom.co.za/distribution/wp-content/uploads/2026/07/Eskom-Tariff-booklet_Final.pdf); [Eskom on the 2026/27 tariff decision](https://www.eskom.co.za/eskom-implements-nersa-decision-for-financial-year-2027/); [Section 12B overview](https://grantza.org.za/energy/12b-tax).*

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