Business Funding Options

Cash Purchase for Business – 12B Tax Benefit

Section 12B of the income Tax Act No. 58 of 1962, as amended (the ‘Act’), provides for capital allowance for movable assets used in the production of renewable energy.

More specifically, it allows for the deduction equal to 100% basis in respect of any plant or machinery brought into use in a year of assessment for the first and used in a process which is of a similar nature.

It is important to note that the allowance is only available if the asset is brought into use for the first time by the taxpayer. In other words, the allowance is not limited to new or used assets.

The wording merely prevents the taxpayer from claiming the section 12B allowance twice on the same asset.

Power Purchase Agreement (Long Term)

No or very little upfront capital cost
PPA monthly payment
Energy expense is deductible as an operating expense
Performance Guarantees (with sufficient reserve to be manageable by the third party owner) and O&M Contracts included in the price
Since you don’t own the commercial solar power system, the third party owner of the system will receive all the tax incentives
What happens to the commercial solar system when the PPA contract expires is typically at the discretion of the third party owner
Your business will be locked in to 10 – 20 year contract

PSC Solar Solutions specialises in providing funding and technical expertise in the solar industry. We partner with approved solar and energy related service companies, solar EPC contractors and solar project developers.

PSC Solar Solutions can assist you in funding solar projects that you source, install service and operate, while we focus on owning , funding, insuring and monitoring the performance of the project.

If you are a prospective company looking for funding for your solar projects, we will guide you through the process of efficiently structuring your funding requirements to maximise your savings or return on your investment.

The minimum funding criteria will be following:

  • Minimum installed capacity: 30kWp
  • Equipment: Tier one (design and equipment spec to be included)
  • Insurance: The project must meet minimum insurance requirements
  • Agreements: End client must have signed letter of intent / interest
  • Performance Guarantees: Minimum performance requirements to be met
  • Regulatory: Projects must meet all regulatory requirements

We can also assist our partners with their engineering and design, procurement, construction and project management, ongoing monitoring and after sales management requirements.

Contact PSC Solar Solutions

Solar Energy Rental Agreement (Short Term Rent to Own)

PSC Solar Solutions is a specialised asset finance services provider for dealers and their valued commercial clients. PSC enables dealers an opportunity to offer their clients an additional method of payment by paying a monthly rental for equipment. Through PSC, clients will have immediate access to 9 funding facilities which includes several innovative methods of gaining and enhancing clients chances of credit approvals.

PSC offers a range of flexible financial solutions to help your company optimise its business management and growth potential:

  • Enhance access to working capital
  • Support business expansion and investment – We can assist in freeing up working capital, improving cash forecasting and budgeting and maximising tax advantages
  • Streamline fixed and moveable asset acquisition
  • We make it our business to create successful partnerships with our customers by:
    • Identifying and understanding their current and future business needs
    • Developing customised solutions to suit their specific business requirements

By leasing your equipment through PSC, you will be entitled to following benefits:

  • Cash flow benefit and preservation. Smoothed cash flow helps with affordability as no lump sum payment and no deposit means that you are able to use your cash in your core business or invest in appreciating assets
  • Removing the hassle factor as we will do all the necessary running around to facilitate credit approvals
  • No impact on your existing credit facilities as we are able to source funding from alternative funders
  • VAT is payable and claimed monthly
  • All lease payments are tax deductible
  • Lease periods can be aligned to warranty periods
  • Upgrades driven by technology are easy, ensuring obsolescence risk is minimised

PSC Solar Solutions aims to form a partnerships with dealers in an effort to offer their valued clients affordable leasing options. Both dealers and clients benefit from leasing option.

Dealer Benefits

  • Easier sales as no large cash payments outlay is required from customers
  • One stop shop as dealers are able to offer a leasing solution on their proposals
  • PSC holds protection of dealers customer base
  • PSC will advise the dealer if competitors are attempting to settle the lease as well as manage settlement amounts to benefit the reseller
  • Leasing allows for easy upgrades and replacement of equipment
  • Leases can be aligned to warranty periods, further encouraging churning og equipment
  • Once all required documentation has been received, the reseller will be paid in 3 -5 working days hence reducing debtor’s days
  • It’s usually easier for clients to obtain an OPEX vs CAPEX approval

Client Benefits

  • Cash flow benefit and preservation. Smoothed cash flow helps with affordability
  • No lump sum payment means that customers are able to use their cash in their core business or invest in appreciating assets
  • PSC removes the hassle factor for the client as PSC will do all the necessary running around to facilitate credit approvals
  • No impact on your existing credit facilities as we are able to source funding from alternative funders
  • VAT is payable and claimed monthly
  • All lease payments are tax deductible
  • Lease periods can be aligned to warranty periods
  • Upgrades driven by technology are easy, ensuring obsolescence risk is minimised
Solar Energy Rental Agreement (Short Term Rent to Own)