Integrating solar energy into construction projects?

With no upfront costs, it preserves liquidity and avoids tying up credit lines while enabling savings as electricity tariffs rise.

With no upfront costs, it preserves liquidity and avoids tying up credit lines while enabling savings as electricity tariffs rise. Supplied by Candi Solar.

The critical success factor in choosing the right finance option is ensuring it aligns with project budgets, timelines, and long-term risk management strategies. Solar experts advise that construction developers and contractors carefully evaluate their financial and operational capacity before opting for traditional financing. For many, innovative, risk-free financing models may offer a more practical solution.

Transitioning to solar energy in the construction sector requires more than upfront capital—it demands careful consideration of performance risks, long-term reliability, and project-specific cash flow constraints. Traditional financing options, such as bank loans, often fall short, leaving developers and contractors exposed to fixed repayments, unforeseen maintenance costs, and underperforming systems.

For construction firms looking to deliver sustainable, energy-efficient buildings without taking on unnecessary risks, partnering with a solar developer to manage the process may be the optimal approach.

Traditional financing vs game-changing new finance models

Traditional bank loans offer businesses access to capital but often leave them to navigate the complexities of solar installations alone. Fixed repayment schedules, collateral requirements, and no operational support mean businesses take on all the risks of underperformance and maintenance.

A more innovative and flexible solar financing option is the Performance-Linked Instalment Sale (PLIS) model, empowering businesses to reap the benefits of solar energy, without the long-term risks associated with traditional financing.

The PLIS model eliminates upfront costs, alleviating financial strain on the business. It preserves liquidity and keeps credit lines free, ensuring the business remains financially flexible.

Most importantly, unlike fixed bank finance repayments, the PLIS pay-as-you-go model also ties flexible monthly repayments to the energy the system generates, so if the system underperforms, the instalments decrease, preventing cash flow problems or extra operational costs.

“Choosing the right financing model based on your business needs and risk tolerance is a crucial success factor for successful solar installations,” says Richard Flamand, Country Lead for Candi Solar South Africa, a Swiss Solar Power Developer, Financier, and Operator that recently introduced the first-to-market PLIS financing model in South Africa.

Candi Solar’s Performance-Linked Instalment Sale (PLIS), an on-balance sheet financing option, is game-changing with a fundamentally different approach. The PLIS model helps businesses own solar assets and benefit from SARS’s 12B tax incentive, which allows businesses to write off up to 125% of their solar investment in the first year.

“Candi Solar doesn’t just finance your solar solution—we take care of every aspect so you can focus on running your business,” said Richard Flamand, Country Lead for Candi Solar South Africa. “Why let traditional financing loan options leave you stranded? With Candi, you gain a partner who ensures your solar system delivers value from day one.”

  1. Expertise beyond financing: Banks stop at providing loans, but Candi handles the entire solar journey. From system design and installation to monitoring and maintenance, Candi ensures that your solar investment performs optimally.
  2. Zero financial and performance risk: With PLIS, businesses pay only for what works through a rate-per-kWh model. There are no upfront costs, fixed payments, or surprises. In contrast, bank loans lock businesses into rigid installment plans, even if the system underperforms, while leaving them with additional O&M costs.
  3. Customised flexibility: Candi tailors its solar solutions to each business’s unique energy needs, offering options for on- and off-balance sheet benefits, as well as longer tenor options. Banks, however, provide standardised terms with little room for customisation.
  4. Security without asset constraints: The PLIS Model secures only the solar system, keeping your balance sheet and credit lines free. Banks, by contrast, often require businesses to tie up significant collateral, including the underlying property.
  5. Zero operational risk: From precise system sizing to timely installation and breakdown management, Candi takes on all operational responsibilities. Businesses relying on banks are left to deal with issues like delays, oversizing, and inefficiencies.

Performance-Linked Instalment Sale (PLIS) – The best of OPEX and CAPEX models

The PLIS model offers businesses ownership of the solar plant while benefiting from tax incentives and reducing operational and performance risks.

With no upfront costs, it preserves liquidity and avoids tying up credit lines while enabling savings as electricity tariffs rise. Unlike fixed bank loans, PLIS aligns repayments with energy generation, reducing instalments if the system underperforms ensuring predictable cash flow. By managing all aspects of system performance, from construction to asset management, PLIS eliminates operational risks and unexpected costs, providing a seamless solar experience without straining internal resources.

For businesses ready to switch to renewable energy the PLIS financing solution offers access to flexibility, support, and expertise required for a seamless solar journey.