The competitive landscape for utility-scale renewable energy has significantly changed over the past decade, with developers driving more aggressive funding terms to remain competitive, says financial institution Standard Bank power head Rentia van Tonder.

The shift in the competitive landscape has resulted in more investors and developers competing for projects. Therefore, financing solutions need to be innovative, consequently forcing financiers to consider different risk allocations as the market matures and becomes more adaptable to change, she explains.

To navigate this shift, Standard Bank is focusing on key drivers of competitiveness including partnering with long-term institutional investors. This approach will enhance its value proposition, which includes new distribution approaches.

As projects become more competitive, developers and sponsors will continue to drive more aggressive funding terms to be successful, Van Tonder notes.

The surge in demand for solar energy financing in recent years has been driven by several factors. For businesses, the need for sustainable and predictable electricity supply, coupled with cost control and environmental, social and governance considerations, has led to an increase in solar installations.

Residential demand has primarily been motivated by the need to mitigate the effects of loadshedding and ensure cost certainty.

Standard Bank offers a range of financing products and services aimed at residential and commercial clients, which include the Solar PV Asset Finance Solution which can be structured to each client’s unique needs.

Home Solar Support
Aimed at residential clients, the LookSee home efficiency platform offers end-to-end home solar services, ranging from individual assessment to installation and aftersales support. Through the LookSee platform, Standard Bank has facilitated the installation of over R150-million worth of home solar systems for clients.

“The platform offers easy-to-understand information, insights and advice, savings calculators and a range of approved home efficiency products and services,” says Standard Bank LookSee, digital and e-commerce personal and private banking head Marc du Plessis.

The LookSee solar loan features personalised interest rates capped at a maximum of prime plus 2.5% and down to prime plus 1% on loans ranging from R3 000 to R300 000, he explains.

The loan provides full system financing, covering solar system and installation costs with flexible repayments tailored to a client’s budget and allowing for up to 60 months to pay.

The platform also launched the free-to-use Solar Score tool for residential properties, which analyses a three-dimensional grid of the home against various factors to assess the suitability of a solar installation on that particular property.

The tool then provides homeowners with insights such as the optimal roof space for solar panels, average days of sunlight, estimated generation ability, and potential savings on electricity costs from the grid over a period of up to 25 years, Du Plessis adds.

Business Solar Power
“Standard Bank was one of the first banks to participate in the Energy Bounce-Back Loan Guarantee Scheme, providing affordable solar loans for personal and business clients,” says Standard Bank power and sustainable solutions head Deerosh Maharaj.

Through the scheme, Standard Bank offers the Business Solar Loan whereby small businesses can access solar loans ranging from R10 000 to R10-million, with repayment periods ranging from 12 to 60 months. There are also other financing products which allow Standard Bank to offer clients longer debt tenors of up to 120 months where necessary.

Standard Bank offers clients access to a list of pre-vetted solution providers, which have been assessed for product quality, expertise and track record. These solution providers use expert industry analysis to assist medium-sized businesses and industrial and commercial enterprises in assessing the feasibility of hybrid solar solutions.

Standard Bank has also developed the PowerPulse – a digital platform aimed at equipping clients with support in completing the feasibility analysis and connecting with these pre-vetted engineering, procurement and construction (EPC) suppliers more effectively.

Since entering the small-scale embedded generation solar PV market, Standard Bank has disbursed over R2.6-billion to support small and medium-sized enterprises (SMEs) with renewable-energy solutions. This has resulted in clients installing 1 347 renewable-energy systems, generating 202 MWp of power from green sources.

Focused Collaboration
With a focus on the solar PV sector, owing to its relevance for SMEs, the bank emphasises close collaboration with the entire value chain to ensure in-depth understanding of various solution providers and brands to enable appropriately packaged funding solutions, says Maharaj.

This involves working closely with original- equipment manufacturers, distributors, aggregators and EPC companies to effectively package funding solutions.

Emphasising Standard Bank’s commitment to partnership and collaboration, Maharaj says the bank engages with technology companies and startups to foster market growth. By staying connected with renewable-energy incubation and accelerator hubs, Standard Bank ensures it remains at the forefront of innovation for future collaborations.

Further, it actively engages with policy makers and regulators to promote favourable conditions for solar energy development. This includes advocating for frameworks that stimulate investment, and collaboration with the private sector to unlock new funding models for transmission development.

Through its comprehensive range of products and services, Standard Bank aims to support South Africa’s transition to a more sustainable and reliable energy future, Van Tonder concludes.