Escaping the Eskom Crisis Part 3 - How Much Can Solar Boost the Average Property Price in SA?
Category News
As South Africa grapples with ongoing electricity challenges and load shedding, homeowners increasingly turn to solar power as a sustainable and reliable solution. Not only does solar energy provide uninterrupted power, but it also offers financial benefits.
In our previous two articles, we outlined frequently asked questions surrounding solar panels and highlighted the potential benefits of going off the grid. Today, we'll explore how solar panels can boost the average property price in South Africa while discussing the current solar panel tax incentive now incentivising homeowners to invest in renewable energy.
Solar Panels - A Profitable Investment for Homeowners
According to Carl Coetzee, CEO of BetterBond, homes equipped with solar panels can sell for 3% to 4% more than those without. This increase in property value highlights the growing demand for energy-efficient homes that offer alternative power solutions. Homebuyers are not only attracted to the sustainability aspect but also appreciate the assurance of uninterrupted power supply, especially during frequent and up ticking load shedding periods.
Taking Advantage of the Recently Announced Solar Panel Tax Incentive
In February 2023, the South African Finance Minister, Enoch Godongwana, unveiled two new tax measures to promote investments in green energy. This was further confirmed in President Cyril Ramaphosa's SONA Address, where he outlined these incentives moving forward.
One of these measures is a solar panel tax incentive that provides homeowners with an opportunity to claim a rebate of 25% of the panel cost, up to a maximum of R15,000. This incentive is valid from March 1, 2023, until February 29, 2024. Homeowners with the financial means to invest in renewable energy are encouraged to take advantage of this limited-time opportunity.
Making Solar Installations Affordable for Homeowners
While solar installations can be costly, various financing options are available to help homeowners transition to renewable energy without breaking the bank. Central banks, including FNB and Standard Bank, offer solar energy loans allowing customers to apply for up to 15% of their property value with new or existing home loans.
The loan amount for the solar installation is added to the overall bond amount, allowing homeowners to benefit from the same interest rate and term as their home loan. Moreover, banks collaborate with accredited renewable energy providers to ensure reliable and competitive solar solutions.
Achieving Energy Independence in South Africa
Experts in the solar field argue that the savings on electricity costs can cover the initial installation expenses within approximately five years. Estimates from financial institutions like Capitec and Absa suggest that the cost of becoming entirely off-grid using solar panels, battery storage, and backup generators ranges from R150,000 to R350,000 for an average household, depending on the chosen financing methods.
For context, Absa's load-shedding finance calculator indicates that a household spending R2,500 monthly on electricity would require over R190,000 to achieve complete energy independence.
Considering the financial benefits and the urgency to address the Eskom crisis, solar solutions have become a necessity rather than a luxury for homeowners. As buyers increasingly prioritise green features and alternative power supplies, investing in solar panels can significantly enhance the attractiveness and value of a property in the real estate market.
Brightening Homes and Property Values
Financing options provided by central banks further make solar installations affordable, allowing homeowners to benefit from the same interest rate and term as their home loans.
Solar panels not only offer a sustainable and reliable energy solution for homeowners but also contribute to increasing the average property price in South Africa. With the recent solar panel tax incentive announced by the government, homeowners can save on installation costs and take a step towards renewable energy.
For more information regarding solar installations in your home, consider visiting Pro IT Services for a professional and reliable solar build breakdown.
Email: sales@proitservices.co.za
Our doors are always open! Visit our website https://www.homesofdistinction.co.za/agents/ or pop by our offices for a chat. Our friendly property practitioners are always available to assist in this regard.
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Author: Bryce Anderson
