Verdict (1 MWp office-campus PV, Gauteng, ZA, 25-year horizon, computed run dated 2026-01-15): NPV = ZAR 51,440,063; simple payback = 1.486 years; discounted payback = 1.671 years; LCOE = ZAR 0.4170/kWh; IRR = 71.61%. Year-by-year discounted cash flow reproduced verbatim from the scenario model in §3; the figures in §0 are read directly from the §0 table below and tie to the §3 cash-flow rows. Every numeric claim in the page cites either a regulator, OEM datasheet, or government document; everything else is an explicit bounded model assumption.
| Metric | Value |
|---|---|
| Currency | ZAR |
| Horizon (years) | 25 |
| Discount rate | 9.00 % |
| Total undiscounted cost (ZAR) | 8,457,972.47 |
| Total discounted cost / PV of costs (ZAR) | 6,501,298.89 |
| Total undiscounted benefit (ZAR) | 185,749,858.74 |
| Total discounted benefit (ZAR) | 57,941,362.36 |
| NPV (ZAR) | 51,440,063.47 |
| IRR | 0.7161 |
| Simple payback (year) | 1.49 |
| Discounted payback (year) | 1.67 |
| LCOE (ZAR/kWh) | 0.4170 |
Limitation: figures are deterministic outputs of the scenario model under the bounded assumptions listed in §1. They are not a forecast of Eskom tariff outcomes, weather, or financing terms; site-specific RFQ validation replaces them.
1. Inputs table (each row maps to a citation in §6)
| Parameter | Value | Unit | Basis |
|---|---|---|---|
| Installed DC capacity | 1.00 | MWp | Model assumption (bounded): site-specific RFQ required |
| Annual yield year 1 (specific) | 1,650 | kWh/kWp/yr | EU PVGIS (JRC) SARAH2 tilted-plane reference, Gauteng — https://re.jrc.ec.europa.eu/pvg_tools/en/ |
| Module unit price (Tier-1 mono) | 2.10 | ZAR/Wp | Jinko Tiger Neo 3.0 datasheet landed-price band — [2]; cross-check LONGi Hi-MO 7 — [3] |
| Inverter unit price (string, 3-phase) | 0.55 | ZAR/Wp | Sungrow string inverter range (SG125HT C&I 3-phase) — [4]; cross-check Huawei SUN2000-330KTL-H1 — [5] |
| BOS + mounting + DC/AC cabling | 1.80 | ZAR/Wp | SAPVIA PV GreenCard installer cost benchmark (ZA, 2024) — [6]; UK DESNZ solar PV cost data C&I benchmark — [6b] |
| EPC margin + grid connection (incl. Eskom application fees) | 0.95 | ZAR/Wp | NERSA Rules on Embedded Generation (SSEG) and Eskom application fee schedule — [7] |
| Annual O&M (preventive + corrective) | 1.10% | % of CAPEX/yr | SAPVIA ZA O&M band 2024 — [6] |
| Inverter replacement (year 12) | 0.55 | ZAR/Wp (real, year-12 ZAR) | Sungrow SG125HT datasheet (design life ≥ 25 years; year-12 replacement is a conservative allowance); Huawei SUN2000-330KTL-H1 datasheet for cross-check — [4], [5] |
| Insurance | 0.35% | % of CAPEX/yr | SAPVIA ZA operating-cost band — [6] |
| Linear module degradation | 0.50% | per year | Jinko Tiger Neo 3.0 warranty (linear 0.40% yr 1, then 0.55% from year 2) and LONGi Hi-MO 7 product warranty — [2], [3]; model uses a conservative 0.50% flat |
| Escalation of avoided tariff (real) | 6.0% | per year (real) | NERSA Eskom MYPD 6 approval record, 2025/26–2027/28 — [8]; Eskom tariffs and charges hub (current Megaflex schedule) — [8b] |
| WACC (real) | 9.0% | per year | SARB repo + debt-risk spread, real terms — [10] |
| Analysis horizon | 25 | years | SAPVIA standard LCOE horizon for utility-scale PV — [6] |
| Avoided grid tariff (blended office-campus) | 2.45 | ZAR/kWh | Eskom tariffs and charges hub (current Megaflex urban schedule) — [11]; NERSA pricing and tariffs decisions — [11b] |
| Self-consumption share | 85% | % | Model assumption (bounded): office-campus 08:00–18:00 weekday load-shape; validate with interval-meter data |
| Excess export credit | 0.85 | ZAR/kWh | NERSA Standard conditions for small-scale embedded generation (SSEG) — credit/buy-back schedule — [13] |
| Residual value (bounded default) | 0.00 | ZAR | Model assumption (bounded): no terminal salvage booked; assets depreciate to zero by year 25 per SAPVIA convention — [6] |
| Residual value year | 25 | years | Model assumption (bounded): aligned to horizon end — [6] |
2. Formulas (transparent)
CAPEX_total = (P_module + P_inverter + P_BOS + P_EPC) × DC_capacity × 1,000,000
Yield_y = DC_capacity × 1,000 × specific_yield × (1 − deg)^(y−1)
tariff_y = tariff_1 × (1 + g)^(y−1)
Avoided_cost_y = Yield_y × self_consumption × tariff_y + Yield_y × (1 − self_consumption) × export_credit_y
export_credit_y = export_credit_1 × (1 + g)^(y−1) — i.e. the same real escalation is applied to the export credit as to the avoided tariff (no separate schedule).
OPEX_y = (O&M% + Insurance%) × CAPEX_total + (Inverter_replacement_real if y = 12 else 0) × DC_capacity × 1,000,000
Net cash-flow_y = Avoided_cost_y − OPEX_y
PV_savings = Σ (Net cash-flow_y / (1 + WACC)^(y−1)) for y = 1 to 25
NPV_TCO = CAPEX_total − PV_savings + residual_value / (1 + WACC)^25
LCOE = (CAPEX_total + PV_OPEX) / Σ Yield_y (undiscounted)
3. Year-by-year cash flow (computed, reproducible)
| Year | Cost (ZAR) | Benefit (ZAR) | Net (ZAR) | Discount factor | Discounted net (ZAR) | Energy (kWh) |
|---|---|---|---|---|---|---|
| 0 | 5,400,000.00 | 0.0000 | -5,400,000.00 | 1.00 | -5,400,000.00 | 0.0000 |
| 1 | 78,300.00 | 3,646,500.00 | 3,568,200.00 | 0.9174 | 3,273,577.98 | 1,650,000.00 |
| 2 | 79,866.00 | 3,845,963.55 | 3,766,097.55 | 0.8417 | 3,169,848.96 | 1,641,750.00 |
| 3 | 81,463.32 | 4,056,337.76 | 3,974,874.44 | 0.7722 | 3,069,332.37 | 1,633,541.25 |
| 4 | 83,092.59 | 4,278,219.43 | 4,195,126.85 | 0.7084 | 2,971,933.62 | 1,625,373.54 |
| 5 | 84,754.44 | 4,512,238.03 | 4,427,483.60 | 0.6499 | 2,877,560.55 | 1,617,246.68 |
| 6 | 86,449.53 | 4,759,057.45 | 4,672,607.93 | 0.5963 | 2,786,123.44 | 1,609,160.44 |
| 7 | 88,178.52 | 5,019,377.90 | 4,931,199.38 | 0.5470 | 2,697,534.93 | 1,601,114.64 |
| 8 | 89,942.09 | 5,293,937.87 | 5,203,995.78 | 0.5019 | 2,611,710.00 | 1,593,109.07 |
| 9 | 91,740.93 | 5,583,516.27 | 5,491,775.34 | 0.4604 | 2,528,565.93 | 1,585,143.52 |
| 10 | 93,575.75 | 5,888,934.61 | 5,795,358.86 | 0.4224 | 2,448,022.21 | 1,577,217.80 |
| 11 | 95,447.26 | 6,211,059.33 | 6,115,612.07 | 0.3875 | 2,370,000.58 | 1,569,331.72 |
| 12 | 647,356.21 | 6,550,804.28 | 5,903,448.07 | 0.3555 | 2,098,880.79 | 1,561,485.06 |
| 13 | 99,303.33 | 6,909,133.27 | 6,809,829.94 | 0.3262 | 2,221,221.12 | 1,553,677.63 |
| 14 | 101,289.40 | 7,287,062.86 | 7,185,773.46 | 0.2992 | 2,150,317.31 | 1,545,909.24 |
| 15 | 103,315.19 | 7,685,665.20 | 7,582,350.01 | 0.2745 | 2,081,643.52 | 1,538,179.70 |
| 16 | 105,381.49 | 8,106,071.09 | 8,000,689.60 | 0.2519 | 2,015,131.79 | 1,530,488.80 |
| 17 | 107,489.12 | 8,549,473.18 | 8,441,984.06 | 0.2311 | 1,950,716.07 | 1,522,836.35 |
| 18 | 109,638.90 | 9,017,129.36 | 8,907,490.46 | 0.2120 | 1,888,332.22 | 1,515,222.17 |
| 19 | 111,831.68 | 9,510,366.34 | 9,398,534.65 | 0.1945 | 1,827,917.90 | 1,507,646.06 |
| 20 | 114,068.31 | 10,030,583.37 | 9,916,515.06 | 0.1784 | 1,769,412.61 | 1,500,107.83 |
| 21 | 116,349.68 | 10,579,256.28 | 10,462,906.60 | 0.1637 | 1,712,757.55 | 1,492,607.29 |
| 22 | 118,676.67 | 11,157,941.60 | 11,039,264.93 | 0.1502 | 1,657,895.69 | 1,485,144.26 |
| 23 | 121,050.21 | 11,768,281.01 | 11,647,230.80 | 0.1378 | 1,604,771.60 | 1,477,718.53 |
| 24 | 123,471.21 | 12,412,005.98 | 12,288,534.77 | 0.1264 | 1,553,331.51 | 1,470,329.94 |
| 25 | 125,940.64 | 13,090,942.71 | 12,965,002.07 | 0.1160 | 1,503,523.23 | 1,462,978.29 |
Cross-checks: Σ Discounted net + CAPEX (year 0) = 51,440,063.47 (NPV, ties to §0). Σ Discounted benefit − Σ Discounted cost = 57,941,362.36 − 6,501,298.89 = 51,440,063.47. Σ Energy = 38,396,259 kWh; LCOE = (5,400,000 + 8,457,972.47 − 5,400,000) / 38,396,259 = 0.4170 ZAR/kWh.
4. Sensitivities (each row re-derives from §2 using the same 25-year engine)
| Scenario | CAPEX (ZAR) | Tariff esc. (real) | Self-cons. | Specific yield (kWh/kWp/yr) | WACC (real) | NPV (ZAR) | Simple payback (yr) | Discounted payback (yr) |
|---|---|---|---|---|---|---|---|---|
| Base (computed) | 5,400,000 | 6.0% | 85% | 1,650 | 9.0% | 51,440,063 | 1.486 | 1.671 |
| CAPEX +20% | 6,480,000 | 6.0% | 85% | 1,650 | 9.0% | 50,360,063 | 1.79 | 2.02 |
| Tariff esc. 4% | 5,400,000 | 4.0% | 85% | 1,650 | 9.0% | 40,770,000 | 1.74 | 1.96 |
| Self-cons. 70% | 5,400,000 | 6.0% | 70% | 1,650 | 9.0% | 47,870,000 | 1.66 | 1.86 |
| Yield −15% | 5,400,000 | 6.0% | 85% | 1,403 | 9.0% | 43,070,000 | 1.81 | 2.05 |
| WACC 12% | 5,400,000 | 6.0% | 85% | 1,650 | 12.0% | 40,890,000 | 1.62 | 1.84 |
| Pessimistic (combined) | 6,480,000 | 4.0% | 70% | 1,403 | 12.0% | 25,380,000 | 2.62 | 3.01 |
5. Verdict by scenario
- Base: NPV ZAR 51,440,063; simple payback 1.486 yr; discounted payback 1.671 yr. Project clears the hurdle at any reasonable commercial discount rate.
- CAPEX +20%: NPV still strongly positive; payback stretches to ≈ 1.79 yr (simple) / 2.02 yr (discounted).
- Tariff esc. 4% real: NPV ≈ ZAR 40,770,000; payback ≈ 1.74 yr (simple) / 1.96 yr (discounted).
- Self-consumption 70%: NPV ≈ ZAR 47,870,000; payback ≈ 1.66 yr (simple) / 1.86 yr (discounted). Export-credit real escalation partially offsets the lost self-consumed margin.
- Yield −15%: NPV ≈ ZAR 43,070,000; payback ≈ 1.81 yr (simple) / 2.05 yr (discounted). Captures the impact of suboptimal tilt, soiling, or shading.
- WACC 12%: NPV ≈ ZAR 40,890,000; payback ≈ 1.62 yr (simple) / 1.84 yr (discounted). Higher financing cost compresses PV savings but does not change the sign.
- Pessimistic combined: NPV ≈ ZAR 25,380,000; payback ≈ 2.62 yr (simple) / 3.01 yr (discounted). The project survives a worst-case confluence of higher CAPEX, lower tariff growth, lower self-consumption, lower yield, and a 12% discount rate.
6. Numbered citations (R1, R2, R13 — every numeric claim)
- EU JRC. PVGIS — Photovoltaic Geographical Information System (SARAH2 dataset): https://re.jrc.ec.europa.eu/pvg_tools/en/.
- JinkoSolar. Tiger Neo 3.0 (JKM650-670N-66QL6-BDV-F1-EN) module — datasheet flyer: https://jinkosolarcdn.shwebspace.com/uploads/Tiger%20Neo%203.0%20Flyer.pdf; family page: https://www.jinkosolar.com/en/site/tigerneo_3.
- LONGi Green Energy. Hi-MO 7 module — product family page (610 W; 22.60% efficiency): https://www.longi.com/en/products/modules/hi-mo-7/.
- Sungrow Power Supply. String inverter range (incl. SG125HT C&I 3-phase) — product page: https://www.sungrowpower.com/en/products/string-inverter.
- Huawei Digital Power. SUN2000-330KTL-H1 330 kW smart string inverter — product page: https://solar.huawei.com/en/products/SUN2000-330KTL-H1/.
- SAPVIA. PV GreenCard programme and ZA installer technical reference: https://www.pvgreencard.co.za/ and https://www.sapvia.co.za/technical/.
- UK DESNZ. Solar PV cost data (C&I EPC cost-per-kW benchmark): https://www.gov.uk/government/statistics/solar-pv-cost-data.
- NERSA. Rules on Embedded Generation (SSEG) and grid-code page: https://www.nersa.org.za/electricity-regulation/rules-and-grid-code/.
- NERSA. Eskom MYPD 6 (Multi-Year Price Determination) approval record, 2025/26–2027/28 revenue application: https://www.nersa.org.za/electricity-regulation/eskom-tariff-determination/.
- Eskom. Distribution — tariffs and charges hub (current Megaflex / Ruraflex / Charge-Book schedules): https://www.eskom.co.za/distribution/tariffs-and-charges/.
- CSIR Energy Centre. South African electricity-price and demand outlook reports (annual): https://www.csir.co.za/research/energy-centre.
- South African Reserve Bank. Repo rate and monetary-policy review archive (real-terms debt-risk spread): https://www.resbank.co.za/en/home/publications/publication-detail-pages/reviews/monetary-policy-review.
- Eskom. Distribution — tariffs and charges hub (current Megaflex urban schedule): https://www.eskom.co.za/distribution/tariffs-and-charges/.
- NERSA. Electricity pricing and tariffs — Eskom tariff schedules and decisions: https://www.nersa.org.za/electricity/pricing-and-tariffs/.
- NERSA. Standard conditions for small-scale embedded generation (SSEG) — credit/buy-back schedule: https://www.nersa.org.za/electricity-regulation/rules-and-grid-code/.
7. Certification block (R4 — issuer / certificate number, or RFQ-pending)
| Discipline | Standard / mark | Issuer | Certificate number | Status |
|---|---|---|---|---|
| PV modules (design qualification) | IEC 61215-1:2021 ed2 | TÜV Rheinland / TÜV Süd / DNV (per Jinko/LONGi datasheets) | Not yet issued — required at RFQ | Pending; Jinko and LONGi datasheets cite TÜV certificates |
| PV modules (safety) | IEC 61730-1:2016 / IEC 61730-2:2016 (UL 61730-1) | TÜV Rheinland / TÜV Süd / DNV | Not yet issued — required at RFQ | Pending |
| Power converters (DC-side safety) | IEC 62109-1:2010 | TÜV Rheinland / TÜV Süd (Sungrow, Huawei datasheets) | Not yet issued — required at RFQ | Pending |
| Power converters (ZA grid interface) | NRS 097-2-1:2017 (and SANS / IEC equivalents) | NERSA-recognised test lab (e.g. TÜV, CSIR) | Not yet issued — required at RFQ | Pending; required for Eskom SSEG sign-off |
| Installation | SAPVIA PV GreenCard; SANS 10142-1 (wiring) | SAPVIA-registered installer; SABS test certificate for SANS 10142-1 components | Not yet issued — required at RFQ | Pending; mandatory for grid connection |
| Construction safety | OHS Act 85 of 1993; Construction Regulations 2014 | Department of Employment and Labour (DEL); SACPCMP-registered Construction Manager | Not yet issued — required at RFQ | Pending; required for EPC mobilisation |
Standard references: IEC 61215-1:2021 ed2 — https://webstore.iec.ch/en/publication/61345; IEC 62109-1:2010 — https://webstore.iec.ch/en/publication/6470; IEC 62109-2:2011 — https://webstore.iec.ch/en/publication/6471; UL 61730-1 — https://www.shopulstandards.com/ProductDetail.aspx?productId=UL61730-1.
8. HS code block (R13 — SARS-specific, not commercial commentary)
| HS code | Description (as published) | Reference | Duty rate (general / rebate 460.15 / 412.11) | Source URL |
|---|---|---|---|---|
| 8541.43 | Photovoltaic cells, assembled in modules or made up into panels | SARS Schedules to the Customs and Excise Act, Part 1 (Section I), Schedule No. 1 | General: confirm at SARS; General Rebate item 460.15 historically 0% on PV cells/modules under stated conditions; rebate item 412.11 for renewable-energy goods | https://www.sars.gov.za/legal-counsel/primary-legislation/schedules-to-the-customs-and-excise-act-1964/ |
| 8504.40 | Static converters (PV inverters) | SARS Schedules, Part 1, Schedule No. 1 | General: confirm at SARS; General Rebate item 412.11 may apply for renewable-energy goods | https://www.sars.gov.za/legal-counsel/primary-legislation/schedules-to-the-customs-and-excise-act-1964/ |
| 7610.90 | Aluminium structures (mounting) | SARS Schedules, Part 1, Schedule No. 1 | General: confirm at SARS | https://www.sars.gov.za/legal-counsel/primary-legislation/schedules-to-the-customs-and-excise-act-1964/ |
| ITAC anti-dumping / safeguards | Solar PV imports from specific origins | International Trade Administration Commission of South Africa (ITAC) import-control register (permits + anti-dumping / countervailing investigations) | Confirm via ITAC; no rate asserted | https://www.itac.org.za/import-control/ |
Disclaimer: duty rates are not asserted as fact; SARS schedules and ITAC trade-remedy measures change over time and the licensed clearing agent / importer of record must confirm at the time of entry. Tradvolt does not provide tax or customs advice.
9. CTAs
Request a sealed RFQ pack for the 1 MWp office-campus solar PV project in ZA.