Frequently Asked Questions

 

GENERAL SOLAR FAQs

  • A solar power plant is a system that produces clean, renewable electrical energy by converting incident solar energy from our sun into electricity through the photovoltaic effect.

  • Solar photovoltaic (PV) modules, installed on a roof, a carport, or a ground-mount structure, harvest photons from the sun and create direct current (DC) electrical energy. This DC electricity is then converted to alternating current (AC) electricity via the solar inverter, which is perfectly synchronised with the frequency and voltage of the grid so that the solar energy can be immediately used by electrical loads.

  • A solar PV system cannot store energy independently; it produces electrical power that must be immediately consumed, either by on-site loads or by exporting to the grid to be consumed elsewhere, or stored in a battery energy storage system (BESS). Batteries allow surplus solar energy to be stored for on-site consumption at a later time. A BESS has a number of other advantages as well, including alleviation of business interruptions from grid outages or, in South Africa, load shedding.

  • It’s green: Solar energy is a renewable and sustainable energy source that produces no operational greenhouse gas emissions. Consumption of clean, renewable power on-site also avoids consumption of grid power which, in many countries, unfortunately still relies heavily on fossil fuels, such as coal.

    It’s cheap: Since the fuel (sunlight) is a free resource, the only significant costs are capital costs. Thus, in most areas of the world with at least a moderate solar resource, solar energy is an affordable energy source and typically cheaper than grid power.

    It reduces air-conditioning loads: Rooftop solar drastically reduces the solar heat gain through the roof of the building on which the solar modules are installed, resulting in energy efficiency savings.

    It’s low maintenance:     While there are no moving parts, solar PV systems are still complex and require both preventative and corrective maintenance. However, when partnering with candi, all risks are taken out of your hands from the start. candi ensures the PV system is looked after to maximise operational yields, prolong system lifetime, and minimise our customer’s responsibilities.

  • A solar-only solution is purely a savings product (i.e. you get power at a lower cost than from your utility). If load shedding is your biggest concern then candi can include backup in the proposed solution either with a BESS (battery storage system) or a diesel generator (DG). This will allow you to get the dual benefits of cheaper and more reliable power. Note, however, that the backup system is no longer a pure savings product, it is something that incurs a cost. Its benefits should be weighed up against the cost of load shedding (i.e. lost revenues to your business).

  • An “on-grid” solar power system can go by many names - utility-interactive solar power system, a grid-following solar power system, a grid-connected solar power system. Each of these describes a solar PV system that can be installed in parallel with a grid supply and interact in a seamless manner.

  • An on-grid solar power system works in conjunction with the main grid to supplement the grid’s power with clean solar energy. When the grid goes down, the on-grid solar power system also shuts down, which is an important safety feature; all utility-interactive grid-following solar inverters must shut down during grid outages.

    An off-grid system is capable of operating independently of the grid and utilises special “grid-forming” inverters that create and maintain the voltage and frequency of the power supply.

    In addition to the above, candi offers microgrid solutions that couple solar PV and BESS (storage), providing both on-grid and off-grid modes of operation. On-grid or grid-following mode is activated when the grid is available. When the grid goes down, the system immediately disconnects or “islands'' the electrical infrastructure from the grid. It then utilises a grid-forming battery or hybrid inverter to seamlessly service any power demands, thereby creating a microgrid that provides a reliable and clean power supply at all times, regardless of grid availability.

  • Rooftop solar functions as described in Question 2 above, with the added detail that the solar array is installed on top of a building’s roof. There are a wide variety of module mounting system options available to cater to all roof surfaces used in the market.

  • Solar energy is not only the future, it is the present. It produces affordable, clean power, and when partnering with candi, can be low-maintenance with zero-upfront costs. This results in immediate savings for your business. When paired with batteries (BESS), candi ensures no more interruptions to your business’s work flow caused by events such as load shedding in South Africa. In many cases, candi can help you save additional money through peak shaving and energy arbitrage.

  • Solar modules are installed by hand by one of our many trusted engineering, procurement, and construction (EPC) contractor partners. candi vets each of our partners to ensure they are among the best in the market. candi reviews and approves work completed throughout all stages of the project from design to commissioning, securing the highest quality output.

  • The rule of thumb is about 8 -10 square metres of rooftop space for a kWp of power to be produced. This is an estimation that is often used but it is not sacrosanct as module capacities change constantly and the nature of the space has an impact on system efficiency (e.g. lots of shadowing/obstacles reduces the true usable area). It is advisable to have a site survey done to determine the solar power system size that can be supported by the available roof area.

  • Net metering involves adjusting exported electricity to imported electricity. Offsetting takes place within the billing period at the applicable grid tariff. Your business either pays for the excess units consumed beyond the solar generation or gets credit for surplus units the plant has generated at the same tariff as the applicable grid tariff.

    In the case of gross metering, your utility compensates your business by paying a feed-in tariff for the electricity generated by the solar power system within the billing period. Typically, no power from the system is consumed on-site with this approach and the grid takes everything.

  • Yes. One key advantage of solar PV is that it is extremely modular. Installation can be upsized based on electricity demand, provided that space is not a constraint.

  • This is an understandable question from people outside the solar industry but the answer is a very simple and categorical one: No.

    Why?

    While it is true that solar technology will continue to be developed in the years to come, the current systems available have been designed with a future-focused approach and already serve a mature market. In addition, cost reductions follow a relatively predictable curve, thus, present pricing may not vary greatly from future offerings. Waiting now may cost your business savings which could begin today.

    Government incentives may become more scarce in the years to come, as the greatest push to transition to renewable energy is taking place now. In many markets, there is a large tax incentive that can be taken advantage of via accelerated depreciation. Whether this benefit affects your business directly or not, it will likely lower the cost of switching to solar significantly.

    As a business owner, you know that current savings will secure the longevity of your business. Cheaper, cleaner power is accessible now and is worth taking advantage of as a step towards the future.

CANDI SOLAR FAQs

  • candi earns a fee for offering a risk-free solar solution that ensures you receive a fully optimised final solution that works smoothly over the long term. Importantly, candi only earns this fee if the solar power system performs, leaving you with total peace of mind that the team is committed to quality installation, care, and maintenance.

    If you wanted to become solar experts, and take the full operational/technical risk of solar going wrong whilst managing the entire implementation and maintenance of the system you would not need to pay candi a fee. In reality that is not achievable given the time and expertise required to do this effectively, whilst still focusing on your core business. See also questions 16, 17 and 18.

  • Banks are in the business of charging interest for the supply of capital, taking credit risk whilst typically having security against your entire business or asset base.

    candi is not a bank. candi delivers a service by supplying the capital, taking on all operational risks, and only taking security against the solar asset. In theory, you could draw down your credit lines from your bank, implement your own Engineering, Procurement and Construction (EPC) contract, and manage and coordinate each step involved in installing and maintaining a solar PV system (from validating equipment and installation quality to ongoing operation and maintenance of the system). This is not necessarily the most efficient approach, however, your downside risk is far higher - no matter how the system performs you still need to pay your monthly loan instalments to the bank which may nullify all of your theoretical savings from solar if the system performs poorly. The elegance of candi’s model is that none of this is your concern. If the system does not perform you simply don’t pay. It is the only model where the customer and the service provider's interests are 100% aligned (we are literally in it together). In addition, the limited and ring-fenced security (i.e. solar asset only) means candi’s solution does not impact your ability to draw down on your other credit lines, candi’s credit decision is streamlined and simple.

  • In theory you could use your own capital to buy the asset outright, implement your own Engineering, Procurement and Construction (EPC) contract, and manage and coordinate each step involved in installing and maintaining a solar PV system.While you may theoretically save some money a) it is not necessarily efficient to perform these tasks outside of your core business effectively, b) your downside risk is far higher - no matter how the system performs you have paid the full price for it, which may nullify all of your theoretical savings from solar if the system performs poorly, c) while the additional savings are theoretically possible the reality may look quite contrary without a professional partnership that is 100% aligned with your energy goals over the long term.The elegance of candi’s model is that you don’t need to worry about any of the installation, running, or maintenance of the system. If the system does not perform you simply don’t pay. This means that candi is highly motivated to ensure the system performs at its very best over a long period. It is the only model where the customer and the service provider's interests are 100% aligned (we are literally in it together).

  • First and foremost it is important to understand whether or not the numbers really are the same. The tariff per kWh may be similar, but is the contract tenor equally matched? Shorter contract tenors allow you to benefit from free power sooner, having an enormous impact on the economics over the life cycle of the system. A 15 year and a 25 year contract at the same tariff per kWh is thus vastly different.

    Another variable that is often overlooked is the tax implications. Some products that candi offers provide you with a significant tax credit, boosting your business’s liquidity outside of the savings you make via the lower electricity tariff. candi can help you to ensure that you are comparing apples to apples in pricing, as it is not always simple. Please contact us if you require support regarding this.

    candi is a company that combines an international footprint with a strong local presence. Having its roots in Switzerland, candi places a strong emphasis on quality. With renowned international investors behind it, candi not only has strong financial partners but an obligation to operate with the highest integrity at all times.

    Furthermore, candi has invested heavily in its ability to monitor multiple sites across a global portfolio remotely, analysing big data sets coming from onsite sensors seamlessly and therefore often reacting more swiftly than other players. candi thus optimises the system’s performance on an ongoing basis making the company a trusted partner for many businesses going solar across India and South Africa. candi has a dedicated team spread across Switzerland, India, and South Africa, focused 100% on solar for businesses with a track record of customer satisfaction to show for it. candi is a partner who not only brings great pricing, but a peace of mind that the job will be done to the highest standards, resulting in a fruitful, long-term relationship for both parties.

  • candi analyses your metering data, site situation, and consumption profile to offer a quote that is optimised for your profile. candi sizes the system so that it performs as efficiently as possible as candi’s interests are aligned with the customer’s interests. Companies that are simply selling hardware are incentivised to maximise the size of the system to maximise the sales price.

  • candi takes responsibility for the solar PV system’s performance risks. In the case of solar plant underperformance, the customer only pays for the electricity that is generated. Should the PV plant be subject to any form of technological failure, the end user similarly foregoes their payment as long as the problem persists. In short, no performance, no payment - candi charges for the kWhs actually generated and used.

  • candi only finances businesses, not residential or other private operations. candi also does not finance businesses involved in activities such as the production of weapons, gambling, or coal mining, etc.

    candi’s purpose is to power a more sustainable planet, thus, in principle, we would like everyone to go solar. Nonetheless, we have these limitations in place to ensure seamless operations and to avoid unnecessary risk.

  • There is no right answer to this. It is really a matter of preference. Long tenor contracts typically generate immediate savings, while short tenor contracts provide greater savings over the lifespan of the solar power system (as you reach the benefits of free power more quickly). Which of these is more important is subjective. candi is committed to working with you to find a suited solution to your business’s needs

  • It takes anywhere between 1 and 4 months to set up the solar power system after completing all formalities, depending predominantly on the size of the system and the complexity of the site.

CANDI INDIA FAQs

  • The advantage of a loan is that the tax ownership (and thus depreciation benefit) of the solar power system rests with the customer. There are no economic downsides to this, however, the asset (and liability) reflect on the customer’s balance sheet, which some corporates prefer to avoid, unlike with a PPA. Loans and PPAs can both be structured in such a way that the customer avoids shouldering any of the risk relating to the system’s performance.

  • The accelerated depreciation benefit allows commercial and industrial owners of a solar power system in India to depreciate their investment in a solar power plant at a much higher rate than general fixed assets. This in turn allows the customer to claim tax benefits on the value depreciated in a given year. For anyone who appreciates the time value of money, the proposition of saving cash in taxes within only the first three years of installing a solar power system is highly lucrative compared to saving the same amount over a period of twenty years. The project's return on investment significantly increases by the virtue of accelerated depreciation.

    You will be able to receive the AD benefits when you file your annual returns. Note that these benefits only exist under candi’s loan structures, not in a PPA.

  • GST benefits are only applicable when the customer owns the system (i.e. buys it for cash or takes a loan to acquire it) since the sale of power under a PPA does not come under the ambit of GST.

  • When the solar power system is sold to the customer on commissioning a GST invoice is issued. The customer can then immediately take the GST benefit and reflect it in their monthly GST filings.

CANDI SOUTH AFRICA FAQs

  • S12B is an incentive put in place by SARS to assist businesses with implementing solar. SARS allows a 100% write-off/depreciation for the value of the system (see 12B of the Tax Act) for projects under 1 MWp in year 1. With a corporate income tax rate of 27%, those purchasing solar essentially get 27% of the system cost back i.e. your company’s net income reduces by 100% of the system cost meaning your tax liability reduces by 27%. In short, SARS offers you cash worth 27% of the system cost in year 1 for going solar.

    For projects over 1MWp the 27% is received over the course of 3 years (50% in year 1, 30% in year 2, and 20% in year 3) but the same logic applies.

    candi helps you to take advantage of this incentive by giving you tax ownership of the solar power system and facilitating your ability to invest in the asset without impacting your business’s cash situation. This ultimately reduces the tariff you need to pay per kWh under the candi contract.

  • We recommend consulting with your tax department with regard to this topic to ensure appropriate handling based on your business’s circumstances. The following is a generic outline of the incentive. The act states that S12B can be claimed in the tax year the asset is brought into use. All companies submit 3 tax returns for their fiscal year (FY), at each of these points S12B credit can be taken advantage of:

    - the first provisional return is due 6 months into the FY
    - the second provisional return is due 12 months into the FY
    - the third return is due 18 months after their FY (if first and second were underpaid)

    Thus, if the solar power system is expected to be commissioned anytime within your current tax year you can reduce your next upcoming tax return associated with that tax year.

    For example, if your tax year runs from Jan to Dec and the solar power system is expected to be commissioned in August, you can 1) either reduce your first provisional tax return in June by the S12B in anticipation of the solar power system coming into use in that tax year or 2) you can reduce your second provisional return in December given the solar power system has been brought into use by then.

    If you select option (1) and the asset is not commissioned in that tax year you would then adjust your December return, reverse the S12B and then only claim it in the next financial year’s first provisional payment.

  • If the business does not have enough taxable profit to write off the full S12B in year one the balance carries over into year 2 or year 3 until the full 27% is written off. The S12B does not expire.

    If the business does not pay tax at all the S12B would be irrelevant. This would most likely result in a higher R/kWh and it may make more sense for candi to maintain ownership of the solar power system until the end of the contractual term through a slightly different contractual structure.

  • VAT is paid on an invoice basis, meaning VAT is due on the issue of an invoice. A valid tax invoice is required by SARS for SARS to refund any input VAT.

    When a system is purchased, candi issues the customer with an invoice for the total value of the system plus VAT.

  • candi’s model is quite flexible. By reducing the upfront investment, candi can look at extending the term of the contract or offer a higher tariff which will still result in cash savings on the transaction.

BATTERY ENERGY STORAGE SOLUTIONS (BESS) FAQs

  • BESS is an advanced battery energy storage system that can supply backup power to businesses during power outages. In many industries a break in power supply can be detrimental to business operations.

    BESS is a compact, quiet and odourless energy source that is expandable and can be easily connected to solar PV should a business decide to go this route.

    The full range of candi solar’s BESS offerings come with energy monitoring which assists businesses in gaining a greater understanding of their energy consumption profile.

  • All of the candi’s BESS solutions have some interactivity with the grid. They can be installed as standalone systems that charge exclusively from the grid when available, in order to discharge when required (e.g. during a load shedding event and during peak tariff periods), or they can be configured along with a solar PV system to have the added benefit of charging with surplus solar energy that may otherwise have been curtailed.

  • Before a BESS is installed on-site, an energy assessment is conducted to determine your energy demand that informs the sizing of the BESS components. The size of the BESS will also be determined by your operational requirements. Is power required to simply keep lights and servers operating or is it required for more complex business operations such as production lines? The latter will have a higher energy demand, requiring a bigger BESS solution.

  • BESS is highly compatible with solar. During a grid outage, the BESS will provide the reference voltage that will keep a solar PV installation operational. It can be set up to store surplus solar energy so that it can be utilised at a later time to meet demands.

  • A BESS on-site comprises four main financial benefits: (1) having a backup power supply to continue business as usual, (2) energy arbitrage, (3) peak load shifting / shaving, and (4) hybridisation with solar.

    BESS can supply an entire business back up, to power all the systems and equipment throughout power outages.

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