With the high levels of loadshedding recently experienced, South Africans are without power for up to 12 hours each day. It’s no wonder then that many households are turning to “off-grid” power sources to keep the lights on and restore a semblance of normalcy.
With the high upfront and ongoing costs of installing solar power in homes, the question of whether it is worth the investment remains.
“Solar power has emerged as the most popular alternative energy option due to its relatively quick installation, soundless efficiency (unlike a noisy generator), its environmental benefits, and the prospect of lower future energy bills,” explains Grant Smee, property entrepreneur and Managing Director of the Only Realty Property Group.
He continues, “However, the upfront costs associated with the solar installation may be prohibitive for the average middle-class homeowner, with options ranging between R59, 000 and R289, 000 according to the pricing from solar provider Solana Energy.”
“Luckily, the increased popularity of solar power has given rise to a variety of innovative financing options to make solar more accessible and more affordable.”
- Outright purchase: Buying the system using one’s own funds.
- Financing the system through a home loan provider: Some banks now let people add the cost of installing solar panels to their home loans.
- Rent-to-own: In recent years, solar financing companies have emerged, allowing consumers to pay a monthly fee for solar and own the equipment after five to seven years.
- A subscription service: GoSolr and other solar power providers offer fixed monthly subscriptions.
Smee also says that it’s important to justify the big initial cost by thinking about how much value it will add to your home in the long run.
According to South African home loan experts at ooba Home Loans, solar panels can increase the value of a property by around 3–4%.
“Taking into account the current electricity crisis in South Africa and with no long-term solution in sight, I believe that this estimate is actually rather conservative,” says Smee.
Selling the buyer long-term peace of mind:
The majority of the country is still experiencing a buyer’s market, meaning that many well-priced and well-designed homes are sitting on the market for far longer than they usually would, due to an oversupply of homes.
“Solar power is definitely a unique selling point and a way for sellers to distinguish themselves from the competition,” Smee comments. “Thus, I would encourage homeowners to make the transition now while they can afford it, as it can be a lifeline should they become financially distressed in the future and need to make a quick sale.”
By investing in solar power, owners are also able to market the “peace of mind” that their property will offer prospective buyers, both in the short and long term.
“The buyer has the assurance that they will be able to work from home and perform daily household tasks such as cooking without interruption.”
Another positive selling point is the prospect of lower electricity bills and resilience against unforeseen tariff increases.
“Eskom was recently approved to implement an 18.65% tariff hike come April 2023, which is yet another blow to South Africans dealing with interest rate hikes and the rising cost of living. In contrast, most solar providers’ annual price increases are in line with annual inflation, giving consumers the ability to plan and budget accordingly,” explains Smee.
Factors to maximise your solar investment:
- Choose your financing option wisely.
- Take the size of the installation into account.
- Make sure that you purchase a hybrid solution.
- Choose a reputable service provider.
And finally, remember that location is key.
“If your roof is constantly in shade, the solar panels will receive very little sunlight to generate electricity, making a costly installation essentially useless. Solar power has the potential to greatly increase the selling potential of your home—but all factors must be considered to maximise your return on investment,” Smee concludes.