Power Purchase Agreements: PPAs
Unlock Solar Savings with a Power Purchase Agreement
Your Path to Eskom-Free Energy in South Africa. At First Energy Solutions, we partner with businesses across South Africa to deliver Power Purchase Agreements (PPAs) that slash energy costs—without any upfront investment.
Imagine locking in electricity rates 20–40% below Eskom’s tariffs, starting from around R1.50–R1.76/kWh, and watching your savings grow as tariffs rise.
Through our collaboration with investment partners, we leverage Section 12B tax deductions and carbon-credit sales to make it happen—all while you enjoy clean, reliable energy and long-term savings.
What Is a Power Purchase Agreement?
A Power Purchase Agreement is a financial arrangement that allows you to benefit from solar energy without purchasing or maintaining the system. We install, own, and operate the solar system on your premises, and you simply buy the electricity it generates at a fixed, inflation-linked rate for 10 – 25 years. You get predictable, lower-cost power, we take care of the rest.
How it works
- Assessment & Design – We evaluate your site and design a custom solar system to match your energy needs.
- Funding & Installation – Our investors fund the system, meaning zero capex for you. Installation is fast—often completed within weeks—and supports local jobs.
- Operation & Maintenance – We handle all monitoring, cleaning, and maintenance. You stay focused on your business while we ensure top performance.
- Billing – You pay only for the energy you use at a rate below Eskom’s blended tariffs, typically escalating by just ~4% per year—far below Eskom’s 12%+ average increases.
Why Businesses Choose PPAs
- Instant Savings: 20–40% lower electricity costs from day one.
- Zero Upfront Costs: We invest in the system; you benefit from the savings.
- No Maintenance Worries: We own, operate, and insure the system.
- Sustainability Leadership: Cut Scope 2 emissions and enhance ESG credentials.
- Predictable Pricing: Fixed inflation-linked tariffs protect you from Eskom volatility.
- Tax & Carbon Benefits: Section 12B deductions and carbon-credit revenue keep rates low.
- BEE & Investment Appeal: Earn BEE scorecard points and attract ESG-minded investors.
Real-World Success
- A Cape Town warehouse signed a 1 MW PPA, cutting bills by R2 million annually while meeting sustainability targets.
- An industrial plant used our PPA structure to fund installed projects, achieving payback in under 3 years.
- Similar rooftop systems (e.g., Pick n Pay 2025 case study) save millions each year; your business could too.
PPA vs. Ownership — Which Suits You?
| Benefit | PPA (We Own & Claim) | Ownership (You Claim) |
|---|---|---|
| Tax Savings | 20–40% lower rates via Section 12B | ± R1.4 M upfront on R5 M system |
| Carbon Credits | We sell and rebate (~R160k–480k / yr) | You sell directly |
| Upfront Cost | R 0 (capex-free) | ± R 3.6 M net after tax |
| Funding Unlock | Investor-funded + credit sales | Easier loans; 3–5 yr payback |
Power Your Future — Get Started Today
A Power Purchase Agreement isn’t just about savings; it’s about smart, sustainable growth. Let First Energy Solutions help you cut costs, protect against Eskom volatility, and turn clean energy into a competitive advantage.
- How long are PPAs? Typically, 10–25 years with flexible exit options.
- How do carbon credits work? We generate and sell credits from your emission savings, then rebate that revenue into lower energy rates.
- Is it Eskom-proof? Yes: your fixed rates shield you from future tariff shocks.
- Can I own the system later? Absolutely: switch to equity models anytime to claim deductions directly.