SAVE UP TO 70% OF YOUR COMPARATIVE ENERGY
COSTS WITH SOLAR PV . . .
WHAT IS SOLAR PV?
“Solar PV” is short for “solar photovoltaic” energy. It is a renewable energy technology that generates electricity by harnessing
the natural light provided by the sun. It is not the same as “solar thermal energy” which uses the warmth of the sun to heat up
(for example) hot water geysers.
Solar PV systems are typically installed on rooftops, car ports or on the ground, and are made up of the following key
components:
1.
2.
3.
4.
5.
PV modules (solar panels) - which consist of silicon or thin film cells that process sunlight into direct current (DC) power
during daylight hours
Inverters - which convert the DC power into alternating current (AC) power so that it can be used by electrical loads such as
air conditioners, equipment, lights, plant and machinery and refrigeration.
Mounting structure (racking system) - that physically holds the PV modules in place.
Balance of system (BOS) - components such as electrical wiring, combiner boxes, circuit breakers etc.
Storage (batteries) - which are used in hybrid or stand-alone systems.
Most of the Solar PV systems provided by ROMANO are grid-tied systems, meaning that they are connected to either the client
side or the utility side of the on-site electrical sub-station.
In the former case, the electricity generated is used on the site by the client. In the latter case the electricity generated is
exported to the national or municipal electricity grid.
HOW DO ROMANO’S CLIENTS BENEFIT FROM SOLAR PV?
South Africa is among the earth’s highest carbon polluters and yet has one of the richest solar resources on this planet. Proven
Solar PV technology is both beneficial to the environment and a great hedge against rapidly rising electricity tariffs. There are
several good financial, environmental and marketing reasons to invest in Solar PV.
1.
Financial benefits
The cost of Solar PV technology (solar panels in particular) has dropped dramatically over recent years, and although the cost of
this technology seems to have bottomed out recently, electricity tariffs have risen steeply relative to inflation and this is
expected to continue for several years to come.
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Generate electricity at a lower cost than purchasing from your utility.
Generate revenue by selling surplus power to your tenants
Increase the value of your building by improving your Green Star rating.
Reduce your capital costs through possible renewable energy subsidies.
Gain from accelerated Tax Allowances and Carbon Tax Savings.
If you need a system that provides security during power failures, Solar PV is far more economical (and greener) than
diesel generators.
 Benefit from the potential sale of Carbon Credits.
2.
Environmental benefits
Reduce your carbon footprint and generate clean, renewable energy for at least 25 years with each Solar PV system that you
invest in. Typically the carbon emission off-set in the 1st year of operation of a 500 kWp Solar PV system is 774.6 metric tons.
3.
Marketing benefits
Enhance your brand's credibility as an environmentally-responsible business through investing in renewable energy technologies
such as Solar PV.
FOUR SOLAR PV OPTIONS PROVIDED BY ROMANO . . .
We offer four standard Solar PV options, all of which offer superior financial benefits:
1.
Outright Purchase (Cash)
You acquire the system using your own cash resources and consume the electricity as it is generated by the system.
2.
Outright Purchase (Financed)
You acquire the system using bank finance and consume the electricity as it is generated by the system.
3.
Solar Lease (Power Purchase Agreement or “PPA”)
You sign a 20-year solar lease with us to purchase the electricity generated by the system. We then sell the electricity generated
by the system to you over the duration of the solar lease. We own the system until the end of year 20 and then cede the rights
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to ownership to you for no charge. Because the system is designed to last for at least 25 years, you receive at least another 5
years of free solar electricity. Note that this option is offered to qualifying clients only.
4.
Property Lease
Some clients do not have a need to own a Solar PV system or to purchase the electricity generated by one. However many of
these clients have vast areas of property (rooftops, car parks or open ground). In these cases the client can earn a passive
income without any capital outlay by leasing their roof space to Romano who will in turn use the roof to provide Solar PV
electricity to a Third Party buyer.
WHICH OPTION IS BEST FOR YOUR ORGANISATION?
1.
Pay-back period under options A & B . . .
st
If on 1 July 2013 you were paying more than 90 c/kWh (excluding VAT) for your daytime electricity usage, and depending on
your site context (i.e. location, orientation and number of days of electricity demand per week) a Solar PV system sized to your
daytime load could achieve a payback of between 5 and 7 years. Because our Solar PV systems are designed to have a
serviceable life of at least 25 years, THIS MEANS THAT YOU WILL RECEIVE AT LEAST 18 TO 20 YEARS OF FREE ELECTRICITY.
2.
Why Option C, the solar lease (PPA), has become a popular option . . .
With our clients’ increasing demand for clean, renewable energy solutions that are cost-effective, our solar lease option is an
ideal, low-risk way of achieving this. Under this option you do not have to own or invest in the system and you pay only for the
electricity that is generated by the system.
The solar lease option enables you to purchase clean energy from ROMANO at a very competitive price per kilowatt hour (kWh).
Compared to what you pay Eskom or your local municipality, potentially you could SAVE UP TO 70% OF YOUR COMPARATIVE
ELECTRICITY COSTS OVER A 25-YEAR PERIOD. Note however that the total amount of savings depends on your geographic
location, the suitability of your premises for Solar PV, and your current comparative energy cost per kWh.
There is no up-front capital investment or on-going maintenance costs, therefore concerns over cash flow or budgeting for
system maintenance are eliminated, as ROMANO carries all the financial, technology and warranty risks associated with the
system.
In addition to purchasing electricity generated by the system at a competitive price, you could also benefit from subsidies that
are currently available for renewable energy systems. This has not been factored into the benefits referred to above.
In South Africa, PPA agreements are subject to regulatory approval.
3.
Which option should you choose?
The chart below compares the Accumulated Net Present Value (Accumulated NPV) of cash flows over a 25-year period between
Option A (Outright purchase for cash), Option B (Outright purchase using bank finance) and Option C (PPA), assuming the system
size is 500kWp (kilowatts peak DC) and the specific yield is 1750 kWh/kWp:
Accumulated NPV for a 500kWp Solar
PV System
R15,000,000
R10,000,000
R5,000,000
R0
(R5,000,000) 1 3 5 7 9 11 13 15 17 19 21 23 25
Option A
Option B
Option C
(R10,000,000)
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Option A and particularly Option B yield the best financial returns if “Accumulated NPV” is the overriding deciding factor
between the options. However these options carry higher risks for the client who becomes the owner of the system from day 1.
Either of these options could save up to 70% (in certain case more) of the client’s comparative energy costs, however the total
amount of savings depends on a number of factors (e.g. geographic location, site conditions and the comparative electricity cost
per kWh). The essential difference between these options is that Option A carries no interest rate risk however it requires much
higher cash resources. Option B will always be cash positive.
Option C does not require capital investment into the system; therefore the client does not carry the associated financial,
technology and warranty risks. It also always yields positive cash flow returns and, as illustrated in the chart below, it will save
the client between 40% and 60% of its comparative electricity costs over a 25-year period.
Accumulated electricity cost over 25 years
R 80,000,000
R 60,000,000
R 40,000,000
Solar PV PPA
(Option C)
R 20,000,000
Conventional
R1 4 7 10 13 16 19 22 25
WHY CHOOSE ROMANO AS YOUR PREFERRED SOLAR PV PARTNER?
We started trading in 1952 and have been in business far longer than any of the other providers currently operating in the
commercial, retail and industrial Solar PV market in Africa.
Our value-added offer includes the design, manufacture and installation of high-quality Solar PV systems that are delivered ontime at a competitive price, to commercial clients spread throughout Africa.
We employ more than 150 people and design, procure, construct, commission and maintain our Solar PV systems using our own
in-house engineering design, project management and installation resources.
Contact us on 011 802 4460 or 021 511 0960, e-mail info@romano.co.za or visit our website www.romano.co.za
OUR CLIENTS . . .
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