FIVE ways to invest your electricity savings

Knowing your Number, or understanding your energy use, requires scrutinizing your utility invoice for the units you have consumed, says Dr Marco Lotz, Nedbank’s Sustainability Carbon Specialist.

“You either get your invoices and bills from a body corporate, the municipality or directly from Eskom. People tend to think of electricity in terms of rands and cents, but one should be looking at the number of kilowatt hours one is using.

“It is also crucial to check how much you are paying per kilowatt hour, and how much you could be saving. Consider technologies like energy efficient lighting, and calculate the potential savings before deciding how to spend or save your money,” he says.

Consumers should also check how much they pay for access to electricity, which is also frequently indicated on the invoice and which is listed separately from the consumption costs. This is the cost paid for being connected to the national electricity grid. This, says Lotz, is a fixed monthly cost month which will not decrease by using less power.

Lotz said that appliances typically associated with heating, geysers and appliances used for heating water or food, typically use the highest amount of energy.

“You need to understand your usage so you know exactly where electricity is being used. Always be conscious of what you warm up or cool. Switch off geysers when you are away for prolonged periods or use timers. Minimize electricity usage where possible,” he advises.

With load shedding likely to remain prevalent in the near future, Lotz says that one should perhaps start looking at investing in energy-saving appliances, especially if current appliances are ready to be replaced. Remember to consider the energy-saving rating of the new appliances before purchasing a new appliance.

Asked about how long it will take to off-set the initial cost of the new appliance against how much can be saved, Lotz says it all depends on a family’s consumption, but can hopefully be easily calculated by the consumer. “The greater amount of time you use a more efficient appliance, the more you save compared to the historic use of an inefficient appliance. Larger families and small businesses such as restaurants could benefit greatly from this,” he says.

Lotz advises consumers to first buy smaller energy-saving appliances to start with their savings, and then later progress to more expensive devices to manage the initial capital outlay.

Speaking generally, Lotz says you should be aware of the national importance of saving electricity.

“In South Africa, we come from a historical background of having a single, national electricity supplier. It may take up to eight years to build sufficient new generation capacity. It is therefore imperative for us to start saving and to heed to the warnings to use electricity sparingly. This is not only good for the country, but saves you money every month,” he says.

Schalk van der Merwe, area manager at Nedbank Financial Planning, has the following advice for consumers who are looking to spend or invest their electricity savings:

Family members should open separate accounts when saving money so they can see it growing every month. A 32 day call account would be ideal for this, he says.

“You should then prioritize your debt and decide what kind of debt you should tackle first. The type of debt which should take priority and be paid off soonest is a credit card, which carries the most expensive interest rate. Settle this as soon as possible – in fact, do this before going into longer-term debt,” he advises.

Paying a bond off with the savings is also an excellent long-term plan.

“Let’s take an example of a R500 000 bond which roughly requires a repayment of about R5 000 a month. By simply adding 10%, or R500 a month, you can reduce the bond repayment from 20 years to 11 years – this translates into a massive saving,” says van der Merwe.

Paying school fees or other accounts upfront can also be a good idea as there is an immediate saving through the discounts offered.

Van der Merwe says people should start their savings accounts immediately.

“It’s like a retirement fund, he says, don’t wait until later – start now and you will be able to reap the rewards. Watching your savings grow will not only encourage you to continue saving more electricity, but will benefit the electricity grid as well. Don’t put it into a cheque account, as it hardly gains any interest and you may be tempted to spend it,” he says.

Van der Merwe says there are three important tips consumers should look at when investing their electricity savings:

 
About 49M: The 49M campaign was launched in March 2011 as a response to the country’s constrained power system. The campaign encourages individuals and corporates to lead energy smart lifestyles thereby saving the planet and their pockets. South Africans are encouraged to join the campaign by visiting www.49m.co.za to pledge their support. Go to the 49M Facebook page or tweet @49m_Co_Za.