Already Own Solar? Here's How to Turn Your System Into Working Capital

If your business installed solar between 2019 and 2023, you made a smart decision. You reduced your electricity bill, cut your grid dependency, and protected yourself against Eskom's relentless tariff increases. But here's what most solar owners in South Africa don't realise: that system on your roof is more than an energy asset. It is a fundable asset — and you can unlock its value today, without losing the energy benefit.

The Problem With "Set and Forget" Solar

Most businesses treat their solar installation as a once-off capital decision. You paid for it, it generates savings, end of story. But the landscape has changed significantly since 2022. Private capital appetite for existing, operational South African solar assets has grown sharply. Institutional funders, specialist Independent Power Producers (IPPs) and private-equity-backed energy companies are actively seeking proven systems to acquire — and they are willing to pay for them. Meanwhile, many businesses that invested in solar are sitting on an asset that delivers energy savings but contributes nothing new in terms of working capital. In a tight economic environment, that's a missed opportunity.

What Refinancing Means at SOLINK: Sale-and-PPA, Nothing Else

At SOLINK, "solar asset refinancing" means one thing: a sale-and-PPA. We do not arrange asset-backed debt against your solar system, and we do not do sale-and-leaseback deals where you keep operating the plant. Both structures leave the operational and performance risk sitting with you — which is exactly the burden most of our clients want to be rid of.

In our model, the business sells its existing solar installation outright to a specialist funder. The funder then enters into a Power Purchase Agreement (PPA) with the business, selling the electricity the system generates at a pre-agreed, below-grid rate. The client exits ownership of the asset entirely. From that point forward, the funder owns, operates, insures and maintains the system. The client simply buys the electricity it produces — cheaper than the grid — under a long-term PPA.

The Three Outcomes You Should Remember

• You get your capital back. The value tied up in your roof is released as cash at financial close, ready to redeploy into the core business.
• You keep the energy savings. Your PPA rate is contractually below your grid tariff for the life of the agreement — the savings do not stop, they just continue under a different owner.
• You never have to think about managing a solar plant again. Ownership, operations, performance, insurance, warranties and regulatory obligations all transfer to the funder on day one.

What You Stop Worrying About the Day the Deal Closes

The single biggest under-appreciated benefit of a sale-and-PPA is not the cheque — it is what falls off your operations team's plate. When the funder takes over the asset, they take over every operational headache that comes with owning a commercial solar plant.

Maintenance and unplanned failures

Routine servicing, panel cleaning, string testing, electrical inspections, inverter servicing and system optimisation all move to the funder. If an inverter fails on a Saturday afternoon in December, it is the funder's on-call team dispatching, not your maintenance manager trying to reach the original installer — who, in many cases, is no longer trading.

Performance risk

If generation drops below what the system should be producing, that is the funder's problem — not yours. The PPA includes minimum generation guarantees with defined remedies, so under-performance results in a credit to you rather than a project you have to investigate and fix.

Monitoring and reporting

Professional-grade remote monitoring is maintained by the funder to protect their own investment. You get clean generation reports without paying for a monitoring platform or interpreting the data yourself.

Insurance and warranty management

The funder carries asset insurance and handles every manufacturer warranty claim — no more chasing panel or inverter OEMs through a defunct installer to prove a fault falls within warranty. Your premiums stop, your admin stops.

Regulatory compliance

Small-Scale Embedded Generation (SSEG) registration, municipal approvals, metering obligations, NERSA compliance and any future regulatory changes all become the funder's responsibility for the life of the PPA. You stop tracking a moving compliance target.

The bottom line: your solar system becomes someone else's core competency, not your side project.

How the Process Works

A well-run solar asset refinancing transaction follows four stages.

1. Free assessment

An independent advisor evaluates the system: installed capacity, technology, generation history and ownership status. Free to the client, no obligation.

2. Competitive tender

The system is taken to a panel of specialist funders simultaneously. Multiple funders competing for the asset is what drives the best outcome: a higher sale price and more favourable PPA terms than any direct approach would achieve.

3. Funder acquisition

The best offer is presented to the client. The chosen funder acquires the system and takes over all operational responsibility.

4. PPA commences

The client begins purchasing electricity from their own system — now owned by the funder — at a below-grid rate. Energy savings continue. Capital is freed.

Is Your System a Candidate?

Not every system qualifies, and any credible advisor will tell you that upfront. The strongest candidates share these characteristics:

• System size: 250 kW and above (larger systems attract more funder competition)
• Commissioned between 2019 and 2023
• Grid-tied solar PV, rooftop or ground-mounted
• Fully owned by the business, not subject to an existing PPA or lease
• Generation records and O&M history available

Agriculture, food production, manufacturing, logistics and commercial property are among the sectors where SOLINK is seeing the strongest funder appetite — businesses with stable, long-term energy consumption profiles and substantial systems.

Why Funder Appetite Is So Strong Right Now

Several factors are converging to make this an optimal window for South African solar asset owners. Existing systems carry no construction risk — funders are acquiring proven technology with a track record of generation. The maturing C&I solar market means there is a growing pool of quality assets reaching the age where funders can accurately model remaining life. Private capital flows into South African renewable energy infrastructure have accelerated, with institutional investors seeking yield from stable, long-duration assets. The window for optimal valuations is open, but as more asset owners become aware of the opportunity, competition among sellers will increase and pricing will adjust accordingly.

A Note on Section 12BA

Businesses that claimed the Section 12BA (or legacy Section 12B) tax deduction on their solar investment should take specific advice before proceeding. A sale may trigger a recoupment — a taxable event where SARS claws back a portion of the deduction if the asset is sold above its tax value. In most cases the net capital benefit still outweighs the tax cost, but this should be modelled properly with your tax advisor before any decision is made. A credible advisor will factor this into the transaction analysis, not gloss over it.

How SOLINK Makes This Happen

A refinancing transaction has three parties with three different interests. The business wants maximum value for its asset and fair PPA terms. The funder wants to acquire a proven asset at the right price with contractual protections. Neither party is positioned to verify the other's claims independently. SOLINK sits in the middle, working exclusively on behalf of the asset owner.

We value the asset

We conduct an independent technical assessment of your operating system: verified generation data against original design, equipment condition, remaining warranted life, degradation analysis and regulatory standing. This produces a technical due-diligence report that both you and the acquiring funder can rely on to price the transaction fairly.

We find the right buyer

SOLINK maintains a panel of specialist funders active in the South African C&I solar market. We take your asset to multiple funders simultaneously — a single funder making a single offer is not a market price. Competition between funders is what drives a higher sale price and better PPA terms for you.

We negotiate the PPA

Once the preferred funder is identified, we negotiate the PPA on your behalf — benchmarking the tariff, scrutinising the escalation clause, reviewing performance guarantees, maintenance obligations and exit provisions. A PPA drafted by a funder protects the funder. A PPA negotiated by SOLINK protects you.

Our fee is paid by the acquiring funder at financial close. The assessment costs you nothing and carries no obligation.

Frequently Asked Questions

What is the difference between solar asset refinancing and a sale-and-leaseback?

In a sale-and-leaseback, the business sells the asset but continues to operate it under an operating lease — meaning maintenance, insurance and performance risk still sit with the client. In SOLINK's sale-and-PPA model the business sells the asset entirely and the funder takes over all operation, maintenance, insurance and compliance. The client simply buys electricity back from the system at a below-grid rate.

Does my business lose its energy savings if it sells the solar system?

No. Under the PPA structure the business continues to receive electricity from the system at a pre-agreed rate that remains below the grid tariff. The energy savings continue uninterrupted, while the capital tied up in the asset is released.

What size solar system qualifies for refinancing?

Systems of 250 kW and above tend to attract the strongest funder interest, as larger systems generate more competition among specialist funders. Smaller systems may still qualify depending on age, ownership structure and available generation data.

Will I owe tax if I sell a solar system that claimed Section 12B or 12BA?

A sale above the asset's tax value may trigger a recoupment under the Income Tax Act, treated as taxable income in the year of sale. In most cases the capital released through the transaction outweighs this tax cost, but it should be confirmed with a tax advisor and factored into the deal analysis before proceeding.

How much does it cost to find out if my system qualifies?

Nothing. The initial technical assessment is provided at no cost and carries no obligation. SOLINK's fee in a successful transaction is paid by the acquiring funder at financial close, not by the asset owner.

Find Out What Your Solar System Is Worth

If you own a commercial solar system and want to know what it's worth, that conversation starts here. Contact our refinancing team directly at funded@solink.co.za, or get in touch via our contact page.