TRADITIONAL bank loans offer businesses access to capital but often leave them to navigate the complexities of solar installations alone. Fixed repayment schedules, collateral requirements, and no opera-tional support mean businesses take on all the risks of underperformance and maintenance, according to Candi Solar.
An innovative and flexible solar financing option is the Performance-Linked Instalment Sale (PLIS) model, empowering businesses to reap the benefits of solar energy, without the long-term risks associated with traditional financing.
The PLIS model eliminates upfront costs, alleviating financial strain on the business. It preserves liquidity and keeps credit lines free, ensuring the business remains financially flexible.
Most importantly, unlike fixed bank finance repayments, the PLIS pay-as-you-go model also ties flexible monthly repayments to the energy the system generates. So, if the system underperforms, the instal-ments decrease, preventing cash flow problems or extra operational costs.
“Choosing the right financing model based on your business needs and risk tolerance is a crucial success factor for successful solar installations,” says Richard Flamand, country lead for Candi Solar South Africa, a Swiss solar power developer, financier and operator that recently introduced the first-to-market PLIS financing model in South Africa.
Candi Solar’s PLIS is an on-balance sheet financing option with a fundamentally different approach. The PLIS model helps businesses own solar assets and benefit from Sars’s 12B tax incentive, which allows businesses to write off up to 125% of their solar investment in the first year.
“Candi Solar doesn’t just finance your solar solution—we take care of every aspect so you can focus on running your business,” says Flamand. “With Candi, you gain a partner who ensures your solar system delivers value from day one.” He explains that the benefits include:
- Expertise. Candi handles the entire solar journey. From system design and installation to moni-toring and maintenance. The company ensures that the solar investment performs optimally.
- Less risk. With PLIS, businesses pay only for what works through a rate-per-kWh model. There are no upfront costs, fixed payments, or surprises.
Customised solutions. Candi tailors its solar solutions to each business’s unique energy needs, offering options for on- and off-balance sheet benefits, as well as longer tenor options. - Security without asset constraints. The PLIS model secures only the solar system, keeping cli-ents’ balance sheets and credit lines free.
- Zero operational risk. From precise system sizing to timely installation and breakdown manage-ment, Candi takes on all operational responsibilities. Businesses relying on banks are left to deal with issues like delays, oversizing, and inefficiencies.
The PLIS model offers businesses ownership of the solar plant while benefiting from tax incentives and reducing operational and performance risks.
With no upfront costs, it preserves liquidity and avoids tying up credit lines while enabling savings as electricity tariffs rise. Unlike fixed bank loans, PLIS aligns repayments with energy generation, reducing instalments if the system underperforms ensuring predictable cash flow. By managing all aspects of system performance, from construction to asset management, PLIS eliminates operational risks and unexpected costs, providing a seamless solar experience without straining internal resources.