The inconvenience of load shedding: Here’s how to finance solar energy systems

South Africans, who are currently experiencing up to 6 hours a day of power outages, are now turning to alternative energy source supplies for solutions.

Beside batteries and generators, solar power seems to be the renewable source of choice.

According to the data collected by the EskomSePush app, there were two load shedding peaks in 2022 — the worst year of load shedding for South Africa to date.

The first peak occurred at the end of June and continued in the first half of July. The second load shedding peak started early in September and is still ongoing.

As such, procompare.co.za, an online platform connecting clients with the best local Pros, confirmed that requests for solar panels have soared in the last couple of months.

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The demand for solar systems skyrocketed in June and reached its peak in early July 2022, which corresponds with the first peak of Eskom outages between the end of June and the first half of July.

The demand fell sharply in August, but picked up again in early September, along with a record number of disruptions of electricity. Even though the winter months are over, when the demand for photovoltaics usually slows down, the requests for solar panels are nearing all-time highs again.

In a country with plenty of sunlight; households and businesses are well positioned to take advantage of the cheap production of solar energy. They can expect to pay between R60 000 and R200 000 for solar panels and installation.

Financing options for solar power systems

Nedbank – SA’s green bank in both branding and environmental consciousness – has stepped up to offer home and business owners several options for funding when it comes to purchasing a solar power system for their property.

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There are three steps in securing a load for one’s home or business property:

• Find an approved solar expert. The loan applicant will have to use a Nedbank-approved supplier in order to secure the loan. This is because the list of Nedbank’s suppliers are fully vetted, accredited and recognised by the South African Photovoltaic Industry Association.
• The applicant would then need to get a needs analysis and quote. The supplier will  perform a needs analysis, obtain an engineering proposal and provide a quote for the energy solution.
• Apply for finance.

MFC Options

The applicant has the option of apply for a loan through MFC’s Asset finance, which is basically like financing a car. They applicant can choose to ask the bank to finance the system over a period of up to 72 months at a competitive interest rate with MFC.

Home loan options

The applicant has the option to finance a solar-energy solution through their Nedbank home loan. This is recommended as the bank reckons that minimal increase on their home loan instalment will be offset by a decrease in their monthly electricity bill.

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The bank offers the NedRevolve option, which enables customers to access surplus funds in their home loans with which they could purchase a suitable system. They would then pay more than the minimum monthly instalment into their account.

They also have the option of readvance and the further loan option. A readvance gives the customer access to a portion of the principal debt that they have already paid off. A further bond involves the registration of a second bond on one’s home.

The bank’s partnership with Hohm Energy

Nedbank also joined in a partnership with Hohm Energy to provide a custom proposal to customers in minutes and access to its marketplace of professional solar installers. Hohm also helps negotiate the best prices from product suppliers and solar installers. Hohm also maintains the purchased solar system so the purchaser has zero-hassle for a 5-year period.

Disclaimers

The financing options are currently only available to South African citizens and the bank has said that it will not finance used, demo or second-hand solutions. The amount financed must also be more than R50 000. It also still remains the customer’s responsibility to ensure the solar supplier verifies the status of the relevant installer and supplier, including their products and workmanship.