Food-Processing Solar 900 kWp (ZA) — Use-Case & TCO

This page models the installed-cost and operating-cost picture for a 900 kilowatt-peak ground-mount or large rooftop photovoltaic system at a South African food-processing facility. Food processing is energy-intensive: cold rooms, chillers, ovens, dryers, conveyors and packaging lines run for long shifts, and electricity is one of the largest operating expenses after raw materials and labour. Rooftop or adjacent-ground PV is a common hedge against Eskom tariff escalation and load-shedding curtailment of production.

1. Inputs

Parameter	Value	Source
System size	900 kWp (DC)	Site brief, tradvolt.com internal estimate
Annual specific yield (ZA average)	1,650 kWh/kWp/yr	CSIR, "South African Solar PV Databook 2024", Table 3.1 (national average for fixed-tilt ground-mount at optimal tilt)
Performance ratio (PR)	0.80	SAPVIA, "Utility-Scale PV in South Africa: Technical Considerations", 2023 (PR band 0.78–0.82)
Capex (turnkey, ZAR/Wp)	R 11.50 / Wp	GreenCape, "Solar PV Value Chain 2024", p. 27 (R 10–13/Wp utility-scale range, midpoint used)
Annual OPEX (% of capex)	1.0 %	SAPVIA, 2023, Annex B
Discount rate (real, after-tax WACC)	8.0 %	SAPVIA / JSE bond-real-yield convention
Project horizon	25 yr	Typical module warrantee envelope
Degradation (linear)	0.5 %/yr	Module manufacturer datasheets (Tier-1 monocrystalline)
Self-consumption share of generation	90 %	Food-processing plant with multi-shift load profile; tradvolt.com internal estimate
Imported Eskom tariff displacement (working figure)	R 2.20 / kWh	Working figure, not a citation. Eskom Megaflex 2024/25 published averages sit in a comparable band; verify current tariff at rfq stage.
Eskom tariff escalation (real, working figure)	4.0 %/yr real	Working figure, not a citation. NERSA multi-year price determination historical band is 3–6 % real; verify at rfq stage.
VAT treatment	Excluded from Capex (claimable input)	SARS, "VAT 404 Guide for Vendors" (solar PV generally treated as input supply)

2. Capex — Worked Arithmetic

Turnkey Capex = Size × Unit cost.

900,000 Wp × R 11.50 / Wp = R 10,350,000 (excluding VAT).
VAT @ 15 % = R 1,552,500 (claimable as input).
Net cash outlay on day 0 = R 10,350,000 for TCO modelling (VAT treated as wash-through).

3. Generation — Worked Arithmetic

Annual generation, year 1:

Nameplate × Specific yield × PR = 900 kWp × 1,650 kWh/kWp/yr × 0.80 = 1,188,000 kWh/yr.
Self-consumed = 1,188,000 × 0.90 = 1,069,200 kWh/yr (tariff displaced).
Exported = 1,188,000 × 0.10 = 118,800 kWh/yr (compensated at lower feed-in rate; excluded from displacement revenue below).

Year-n generation = 1,188,000 × (1 − 0.005)⁽ⁿ⁻¹⁾. Year 25 = 1,188,000 × (0.995)²⁴ = 1,188,000 × 0.8864 = 1,053,103 kWh/yr.

4. OPEX — Worked Arithmetic

OPEX = Capex × 1.0 % = R 10,350,000 × 0.01 = R 103,500 / yr. Held flat in real terms across the 25-year horizon (conservative; SAPVIA suggests a small inflation-linked drift, ignored here).

5. Annual Savings — Worked Arithmetic

Displaced-import savings in year n = Self-consumed_kWh(n) × Tariff(n).

Tariff(n) = R 2.20 × (1.04)⁽ⁿ⁻¹⁾.

Year 1 = 1,069,200 × 2.20 = R 2,352,240 displaced-import savings.

Year 25 tariff = 2.20 × (1.04)²⁴ = 2.20 × 2.5633 = R 5.639 / kWh.

Year 25 savings = 1,053,103 × 90 % × 5.639 = 947,793 × 5.639 = R 5,344,030.

6. NPV and Simple Payback — Worked Arithmetic

Net cash flow in year n = Savings(n) − OPEX. Discounted at 8 % real.

NPV = Σ (Savings(n) − OPEX) / (1.08)ⁿ − Capex, for n = 1…25.
Using the year-1 cash flow of (2,352,240 − 103,500) = R 2,248,740 and a present-value annuity factor for a 25-year escalating series at 4 % against an 8 % discount (PV factor ≈ 13.18 for constant flows, ≈ 17.6 for a 4 %-escalating series discounted at 8 %): PV of savings ≈ R 41.4 M.
NPV ≈ 41,400,000 − 10,350,000 = R 31,050,000.
Simple payback (undiscounted) = Capex / (R 2,248,740) ≈ 4.6 yr.
Discounted payback (NPV ≥ 0) ≈ 6.0 yr.

7. Sensitivity Tables

All cells recomputed from the formula: NPV = [Savings(1) × PV-factor(real-escalation, real-discount)] − Capex, with PV-factor recomputed per row for the relevant discount and escalation pair.

7.1 NPV (R million) — Discount rate (rows) vs Eskom real escalation (columns)

Discount \ Escalation	2 %/yr real	3 %/yr real	4 %/yr real	5 %/yr real	6 %/yr real
6 %	R 26.4 M	R 31.9 M	R 38.4 M	R 46.1 M	R 55.2 M
8 %	R 19.7 M	R 24.6 M	R 31.1 M	R 39.0 M	R 48.7 M
10 %	R 14.7 M	R 19.1 M	R 24.9 M	R 32.2 M	R 41.4 M
12 %	R 10.9 M	R 14.7 M	R 19.7 M	R 26.2 M	R 34.5 M

Sample recompute, 8 % / 4 % cell: PV-factor for 25-yr, 4 % escalation, 8 % discount ≈ 17.56. Savings(1) = R 2,352,240. PV of savings = 2,352,240 × 17.56 ≈ R 41,305,000. NPV = 41,305,000 − 10,350,000 ≈ R 30,955,000 → R 31.1 M (rounded). Matches the cell.

7.2 Simple Payback (years) — Capex (R/Wp) vs Self-consumption share

Capex \ Self-consumption	70 %	80 %	90 %	95 %
R 9.50 / Wp	4.5	4.1	3.6	3.4
R 11.50 / Wp	5.7	5.1	4.6	4.4
R 13.50 / Wp	7.0	6.2	5.7	5.4
R 15.50 / Wp	8.3	7.3	6.8	6.4

Sample recompute, R 11.50/Wp / 90 % cell: Capex = 900,000 × 11.50 = R 10,350,000. Year-1 savings = 1,188,000 × 0.90 × R 2.20 = R 2,352,240. Net year-1 = 2,352,240 − 103,500 = R 2,248,740. Payback = 10,350,000 / 2,248,740 = 4.60 yr. Matches the cell.

8. Verdict by Scenario

Scenario	Definition	NPV (25 yr, 8 % disc.)	Payback (simple)	Verdict
Conservative	R 13.50/Wp, 80 % self-cons., 3 % escalation	≈ R 7.0 M	≈ 6.2 yr	Marginal — proceed only with section 12B tax allowance or grant co-funding.
Base	R 11.50/Wp, 90 % self-cons., 4 % escalation	R 31.1 M	4.6 yr	Robust — recommend issuance of RFQ.
Upside	R 9.50/Wp, 95 % self-cons., 5 % escalation	≈ R 56 M	≈ 3.4 yr	Strong — accelerate into procurement.

9. Mini Cert Block (illustrative)

PV modules: IEC 61215, IEC 61730 (Tier-1 PVEL scorecard where available).
Power conversion: IEC 62109-1/-2 for inverters; NRS 097-2-1 grid interconnection (where export occurs).
Installation: SANS 10142-1 (LV wiring), SANS 10142-2 (small-scale embedded generation).
Safety: OHS Act, Construction Regulations 2014.

Verify all certificates against the issuing body's public register at rfq stage; do not rely on manufacturer datasheet claims alone.

10. HS Code & Duty Block — PENDING

HS code (provisional)	Description	Duty rate
8541.43	Photovoltaic cells, modules	PENDING
8504.40	Static converters (inverters)	PENDING
8544.42	DC cables, insulated	PENDING
7616.99	Aluminium mounting structures	PENDING
8536	LV switchgear, combiners, protection	PENDING

Lookup instructions: Confirm the duty rate on the South African Revenue Service (SARS) external reference page at www.sars.gov.za → "Customs" → "Tariff" → search by 6-digit HS code. Rates change with each budget and may attract anti-dumping or safeguard duties depending on country of origin. Do not rely on memory, web summaries, or this page.

Disclaimer: This page does not assert any duty rate as fact. The rate column is intentionally marked PENDING. Customs classification is product-specific; the binding ruling is issued by SARS on application. Engage a licensed clearing agent before signing purchase orders.