As electricity prices continue to soar and grid reliability declines, South African farmers grapple with rising energy costs threatening essential operations like irrigation, refrigeration, and processing. Solar energy is emerging as a powerful ally for the agricultural sector, offering cost savings, sustainability, and energy independence.

The transition to solar energy has been transformative for family-run farms like Genade Boerdery and Delpa in the Northern Cape. Thanks to an innovative Performance Linked Instalment Sale (PLIS) financing model, these farms are now enjoying the benefits of solar plant ownership without upfront costs or financial strain.

Case Study: Genade Boerdery and Delpa Farms

Located in Douglas, Northern Cape, Genade Boerdery and Delpa Farms specialise in wheat, maize, potatoes, and pecan nuts. As electricity bills climbed, the farms faced growing financial pressure. Turning to solar energy, they partnered with Candi Solar to implement customised solutions that met their energy needs and financial constraints.

Highlights of their solar journey:

  • Immediate financial savings: Genade Boerdery saved over R1 million in just two years, while Delpa recorded R3,6 million in savings in just over a year in avoided utility payments.
  • Tax Benefits: Leveraging South Africa’s Section 12B tax deduction, the farms claimed up to 125% of the system’s cost in the first year.
  • Environmental Impact: Together, they mitigated over 9,000 tonnes of CO₂ emissions in just one year.

At Genade Boerdery, 11 solar sites now power irrigation pumps drawing water from a nearby river. The panels were installed on unused land to avoid interference with farming activities, while inverters were housed in secure custom-built rooms for enhanced efficiency. Delpa implemented a similar setup, benefiting from full-service support, including design, installation and performance monitoring.

Introducing the PLIS financing model: A game-changer for farmers

The success of these Northern Cape farms highlights the potential of Candi Solar’s Performance Linked Instalment Sale (PLIS), an on-balance sheet financing model specifically designed to address the unique financial challenges faced by South African farmers.

Farmers often prefer to own the solar system but need help with the upfront costs. “Traditional financing options, like bank loans, have limitations, such as collateral requirements and fixed repayments, despite seasonality impacting their incomes. Power Purchase Agreements come with zero-risk but do not offer solar ownership and tax benefit.,” explains Richard Flamand, Co-Country Lead for Candi Solar South Africa. “The PLIS model eliminates these barriers, guarantees performance, and offers farmers an affordable and flexible way to own their solar systems from day one.”

Key benefits of the PLIS model:

  • Full solar ownership without upfront costs: Farmers own solar systems on their balance sheet, enabling them to take advantage of tax benefits while achieving energy independence.
  • Performance-linked payments ensure zero risk: Payments are tied directly to the system’s energy generation with payments per kWh, ensuring financial predictability and reduced risk. If the system generates less energy than projected, payments adjust accordingly, providing flexibility and peace of mind.
  • Tax incentives: The PLIS model qualifies for South Africa’s Section 12B tax deduction, allowing farmers to claim up to 125% of the system’s cost in the first year.
  • Comprehensive support: The model covers everything from financing to engineering, installation, repairs and maintenance, and performance management, letting farmers focus on their core operations.

A sustainable future for South African agriculture

As South African farmers increasingly adopt solar energy, they align with global trends in renewable energy use in agriculture. “With models like PLIS, solar energy is no longer a distant dream for farmers. It’s a practical, zero-risk solution that supports ownership without any operational and performance management hassles,” concludes Flamand.

For more information about transitioning to solar energy through the PLIS model, visit www.candi.solar