Choose a PPA if...
Preserving capital. A PPA reduces the upfront capital you need, and you pay for the electricity the system produces.
Solar PPA, lease or buy: how business solar financing works in South Africa
Solar financing options for factories, warehouses, office parks, farms, industrial parks, commercial parks, schools, universities, hospitals, clinics, distribution centres and manufacturing facilities. Green Leaf installs solar for factories and warehouses in Midrand, Johannesburg and across Gauteng.
A solar power purchase agreement (PPA) is a finance option that reduces the upfront capital a business needs for solar. A provider funds, installs, owns and maintains the system on your roof or land, and you pay only for the solar electricity you use, at an agreed rate per kWh that rises by an agreed amount each year. With a lease (rent-to-own) you pay a fixed monthly rental and can take ownership at the end. Buying outright costs the most upfront but usually gives the lowest lifetime cost per kWh, and the owner can claim the Section 12B allowance.
Green Leaf offers PPA, lease and outright purchase for businesses, mainly in Gauteng, with projects across South Africa, Zambia and Zimbabwe. PPA and lease options are available directly or through a finance partner.
What is a solar PPA?
A PPA is a long-term contract to buy electricity. The provider owns the solar plant and carries the capital cost and performance risk. You buy the kWh it generates at an agreed rate, usually with a set annual escalation. Any power the system cannot supply still comes from the grid as normal.
Who these options suit
- Businesses with steady daytime electricity use
- Factories, warehouses, office parks, retail centres and farms in Gauteng
- Building owners, or tenants with a long lease remaining
- Companies that would rather keep capital for their core business than spend it on energy assets
We will confirm which options are available for your site.
Need power after dark, lower demand charges or backup? Ask us about adding battery energy storage (BESS) to your system.
How it works
- Site assessment and a review of 12 months of consumption and tariffs
- A proposal setting out system size and the funding options available to you, with their terms
- Green Leaf handles design, SSEG/municipal approval, installation and commissioning
- Monitoring and maintenance arrangements are agreed in your proposal
What is a solar lease (rent-to-own)?
With a solar lease, or rent-to-own, you pay a fixed monthly rental instead of buying the system. The provider owns the system during the term, and ownership usually passes to you at the end. GreenCape notes that the customer isn’t responsible for performance risk under a lease-to-own (Energy Services Market Intelligence Report 2025, Table 3).
PPAs vs leasing vs buying outright (general comparison)
| PPA | Lease / rent-to-own | Buy outright | |
|---|---|---|---|
| Upfront capital | Reduced: the provider funds the system | Reduced: spread as a monthly amount | Full capital cost |
| Who owns the system | The provider | Depends on the agreement | You |
| What you pay for | The solar electricity produced | A fixed monthly amount | The system itself |
| Section 12B | Provider (owner) claims | Depends on the structure; ask your tax adviser | You claim it if you own it and use it in your trade |
| Typical term | 10–20 years (GreenCape, Mar 2026) | 10 years in GreenCape’s benchmark | n/a |
| Maintenance and performance risk | Provider | Depends on the agreement | You, or an O&M contract |
| Best for | Preserving capital | Spreading the cost | Maximum lifetime saving |
This is a general comparison of how these models usually work. The terms for your project are set out in your proposal.
What do PPAs and leases cost in South Africa? (market benchmarks, not a quote)
GreenCape’s industry brief, Solar PV for businesses in the Western Cape (Table 1, Mar 2026), describes PPA tariffs as “typically below Eskom or municipal rates”, with escalation linked to inflation and contracts of 10–20 years. A lease-to-own is a fixed monthly payment, typically over 10 years and excluding annual escalation, after which the system is yours.
Green Leaf pricing is by quote only, after a free site assessment. The rate for your site depends on your bill, your roof and your tariff, and is set out in your proposal. Contact us for pricing.
For purchase prices, see what a 100–500 kW commercial solar system costs. For systems we have built, see our projects.
Section 12B: who gets the tax benefit?
Businesses that own PV of 1 MW or less can deduct 100% of the cost in the year it is first used; larger systems 50/30/20 over three years. The owner claims it, so under a PPA the provider claims it, not you. The 125% Section 12BA allowance ended on 28 Feb 2025 (SARS IT39; Forvis Mazars, 27 Mar 2025). Ask your tax adviser.
Accounting note (IFRS 16)
Depending on how it is structured, a PPA may have to be recognised as a lease under IFRS 16. Check the accounting treatment with your auditor before you sign.
Questions to ask any PPA or lease provider
- What is the escalation based on: inflation (CPI) or a fixed percentage?
- Is there a performance guarantee, and what happens if the system under-produces?
- Who insures the system?
- Can you settle early, and how is the settlement amount worked out?
- Is it take-or-pay, or do you pay only for the energy you use?
- What happens during a grid outage?
- Can excess power be exported, and who gets the credit?
- Are batteries included, or can they be added?
- What are the options at the end of the term?
Solar PPA and lease FAQ
What is a solar PPA?
A Power Purchase Agreement (PPA) is a contract in which a provider installs and owns a solar system on your site and you pay only for the electricity it produces, at an agreed rate.
Does Green Leaf offer PPAs, leasing or purchase options?
Yes, for businesses. PPA and lease options are available directly or through a finance partner, and you can also buy the system outright. Your written proposal sets out the terms for your site.
How does a PPA reduce the upfront capital a business needs?
Under a PPA model the provider funds the system rather than the business, so the business does not have to find the capital to buy it. Whether any other fees apply depends on the specific agreement, and your written proposal sets them out.
Who owns the solar system under a PPA, and under a lease?
Under a PPA the provider owns, insures and maintains the system for the contract term. Under a lease the provider owns it during the term, and ownership usually passes to you at the end.
Is a PPA cheaper than buying solar?
Usually not over the system’s life: a PPA tariff includes the funder’s cost of capital, so buying outright normally gives the lowest lifetime cost per kWh. A PPA’s advantage is that it reduces the capital the business has to put in.
How long is a solar PPA contract in South Africa?
Typically 10 to 20 years (GreenCape, Mar 2026).
Can I claim Section 12B on a PPA or a leased system?
Only the owner of the system can claim Section 12B, so under a PPA the provider claims it. For a lease, it depends on the structure; check with your tax adviser.
Who handles SSEG registration?
Green Leaf handles SSEG registration and municipal approval as part of every project.
Can I still use grid power?
Yes. Any power the solar system cannot supply still comes from the grid as normal.
Finance solutions for business solar
Green Leaf offers finance options to reduce the upfront capital a business needs to go solar. PPA and lease options are available directly or through a finance partner. Under a PPA the provider funds, owns and maintains the system and you pay an agreed rate per kWh for the solar electricity you use. Under a lease you pay a fixed monthly rental and can take ownership at the end of the term. Battery storage can be included in either structure.
Outright purchase remains available for businesses that want to own the system from day one and claim the Section 12B allowance. Your written proposal sets out the structure, term, tariff or rental and any other fees for your site. Request a proposal.
Talk to us about funding
Request a free site assessment or call the office on 011 705 2427.
Choosing the right option
Choose a lease if...
Spreading the cost. A lease spreads the cost as a fixed monthly amount, reducing the upfront capital you need.
Choose to buy if...
Maximum lifetime saving. Buying outright means full capital cost upfront, but you keep the full lifetime saving.
Not sure?
Not sure? Send us your last 12 months of electricity bills and we will explain which options are available for your site.
Ready to go solar?
Send us your last 12 months of electricity bills and we will assess your site and explain your options.
Request a free site assessment or call the office on 011 705 2427.