South African businesses are facing a double energy problem: electricity tariffs that have increased by over 500% in the past 15 years, and ongoing load shedding that interrupts operations and costs money every time the lights go out. Solar power addresses both — and for most commercial customers, the financial case has never been stronger.
But how fast does a business solar system actually pay off? What ROI can you realistically expect? And what factors make the biggest difference to your payback period? This guide gives you the honest numbers — no marketing spin.
Return on investment for a commercial solar system is driven by one core metric: how much electricity you avoid buying from Eskom or your municipality, valued at current and future tariff rates.
The formula is straightforward:
The key insight is that your savings grow every year as electricity prices rise. A system that saves you R120,000 in year 1 might save R180,000 in year 5 — with zero additional investment.
The examples below use a typical Gauteng commercial tariff of approximately R2.80/kWh (medium voltage business, including network charges). Tariffs vary by municipality and consumption level.
| Business Type | Monthly Electricity Bill | Solar System Size | Approx. Installed Cost | Estimated Payback |
|---|---|---|---|---|
| Small office / retail | R8,000 | 15kWp | R180,000 – R250,000 | 4 – 5 years |
| Medium warehouse / factory | R35,000 | 60kWp | R600,000 – R850,000 | 3.5 – 5 years |
| Large commercial building | R120,000 | 200kWp | R1.8M – R2.5M | 3 – 4.5 years |
| Remote lodge (off-grid) | R25,000 (diesel equiv.) | 30kWp + storage | R700,000 – R1.2M | 5 – 8 years |
Standard solar ROI calculations only count electricity cost savings. They ignore what load shedding actually costs your business. Consider:
When you add the revenue protection value to the electricity savings, payback periods often compress by 1–2 years. Many businesses with high load shedding exposure achieve effective payback in 2–3 years on a fully loaded cost-benefit analysis.
This is the factor most people underestimate. South African electricity tariffs have consistently increased above inflation. The National Energy Regulator of South Africa (NERSA) has approved increases averaging 8–15% per year over the past decade.
Your solar system's cost is fixed at today's price. But the value of every kWh it generates grows with each tariff increase.
| Year | Tariff (at 10% annual increase) | Annual Saving (60kWp system) |
|---|---|---|
| 1 | R2.80/kWh | R235,000 |
| 3 | R3.39/kWh | R285,000 |
| 5 | R4.11/kWh | R345,000 |
| 10 | R6.62/kWh | R556,000 |
Over a 25-year panel lifespan (standard warranty period), the cumulative savings from a R700,000 system can easily exceed R8–12 million in nominal rand terms.
The South African government recognises the importance of private sector renewable energy investment. Under Section 12B of the Income Tax Act, businesses can claim an accelerated depreciation allowance on qualifying solar and renewable energy assets.
The incentive allows a significant portion of your solar investment to be deducted from taxable income in the first year. For a business paying 27% corporate tax, this can reduce the effective cost of your solar system by 20–30%, dramatically improving both payback period and ROI.
Consult your tax advisor for current rules — the details have been updated in recent years and the applicable allowances depend on your structure and timing.
Lowest capital cost, best pure-electricity ROI. The system generates power during daylight hours and feeds it directly into your building. You draw from the grid at night and on cloudy days. Does not provide load shedding protection — grid-tied inverters are legally required to shut down when grid power fails for safety reasons.
Higher upfront cost than grid-tied, but provides load shedding protection by storing daytime solar in batteries for use when the grid is down. The battery adds cost but the ROI from both electricity savings and load shedding protection can make total returns superior over 5+ years.
Complete energy independence. Highest upfront cost due to large battery banks required. Best suited for remote properties, lodges, farms, and sites where grid connection is expensive or unreliable. ROI is typically measured against generator fuel and maintenance costs rather than grid tariffs. See our Complete Off-Grid Solar Guide for Remote Lodges.
Solar panel prices have fallen by over 80% in the past decade and have largely stabilised. Electricity tariffs continue to rise. Inverter and battery technology is mature and reliable. The incentive environment in South Africa is supportive. The answer for most businesses is: the best time was five years ago; the second best time is now.
Every month you delay, you pay Eskom. Every month after installation, your system earns you money.
Ready to see what solar looks like for your specific business? Get a consultation or explore our solar solutions for businesses and lodges.
For a grid-tied commercial solar system in South Africa, the typical payback period is 3–6 years. The exact timeframe depends on your current electricity tariff, system size, sun hours at your location, and how much of the solar output you consume directly. Off-grid systems with large battery banks have longer payback periods of 6–10 years but provide complete energy independence.
Most South African businesses achieve an annual ROI of 15–30% on their solar investment when calculated against avoided electricity costs and tariff escalation. This compares favourably to most other business investments and is essentially inflation-proof since energy prices continue rising.
Yes, significantly. Load shedding adds a productivity and revenue cost that is often excluded from basic ROI calculations. When you factor in avoided revenue loss, generator fuel savings, and the value of uninterrupted operations, the effective payback period can be 1–2 years shorter than a pure electricity-cost calculation suggests.
Yes. The South African government introduced an enhanced tax incentive under Section 12B of the Income Tax Act, allowing businesses to deduct a significant portion of the cost of qualifying renewable energy assets in the first year. This incentive significantly improves the after-tax ROI of solar investments. Consult your tax advisor for the latest rules.
A small business with a monthly electricity bill of R5,000–R15,000 typically needs a 10kWp–30kWp solar system. A medium business spending R15,000–R50,000/month would look at 30kWp–100kWp. The exact sizing requires an energy audit, but a rough rule is 1kWp of solar for every R300–R500 of monthly electricity cost you want to offset.