How solar installations can add value to residential properties
Antonie Goosen
AS LOAD shedding continues to impact daily life, homeowners are increasingly seeking alternative energy solutions. With the recent announcement of a tax rebate for solar installations, the time is ripe for homeowners to explore the advantages of solar power.
South Africa’s electricity crisis has made it crucial for households to consider alternative energy solutions to keep their homes running. Solar power offers a viable and sustainable solution, and with the government’s tax rebate initiative, the financial burden of installation can be alleviated.
The tax rebate for solar installations allows homeowners to claim up to 25% of the cost of solar photovoltaic (PV) panels, with a maximum rebate of R15 000. The rebate applies to new and unused solar PV panels with a minimum capacity of 275 W per panel.
This incentive is designed to reduce pressure on the national power grid, and promote the adoption of renewable energy sources. Homeowners have nine months left in which to take advantage of this opportunity, as the tax benefit is only available for the 12-month period starting from 1 March 2023.
Financing the cost of installation
Solar installations not only offer a relatively quick and silent installation process, but also have the potential to lower future energy bills and benefit the environment. However, the upfront costs associated with solar power installations have been a prohibitive factor for many homeowners, even with the current tax incentives in place.
Fortunately, various financing options are now available to make solar power more accessible and affordable.
Colin Strumpher, a sales manager at bond originator BetterBonds, highlighted the financial services options available to homeowners at the recent 10th Energy Digicon, an event hosted by Alan Winde, the Premier of the Western Cape.
- Existing home loans can be increased to cover the cost of installing solar panels, allowing homeowners to spread the investment over a longer period.
- Additionally, new homeowners can apply for financing from the beginning of the home-buying process.
- Furthermore, rental options for solar power systems are available through certain financial institutions.
The worldwide demand for solar power solutions has led to a variety of options becoming available, leading to a significant drop in costs. In South Africa, this increasing demand has resulted in a number of specialist financing options becoming available for homeowners, making solar installations more affordable and accessible than ever before.
Adding value to your home
Investing in solar power can have a positive impact on property values. Studies conducted by the South African Photovoltaic Industry Association (SAPVIA) have shown that solar installations can increase the value of a property by around 3 to 4%. I believe that these estimates are still conservative, and that the value can be increased by as much as 8%.
According to SAPVIA, the installation of solar panels provides potential buyers with the assurance of reduced energy costs and a more sustainable lifestyle. This appeal is particularly significant in South Africa, where the electricity outages and escalating electricity prices have started to inhibit uninterrupted functioning of households.
Solar panels have proven themselves to have a long lifespan and require little in the way of maintenance, providing homeowners with a reliable and low-maintenance energy solution.
Additionally, solar solutions are becoming more versatile, with options available to address small-scale requirements such as outdoor lighting, mid-level solutions like solar geysers to cut the cost of heating water, and major solar solutions that can take a home off the electricity grid entirely.
In addition, the South African government is considering legislation that could allow homeowners to sell their surplus solar power back to the grid, further increasing the financial benefits of solar installations. This potential opportunity opens up the possibility of homeowners not only reducing their electricity bills but also generating additional income through their solar installations.
Solar power solutions are typically scalable, which means that homeowners can easily add extra solar panels or batteries as finances become available or household demand increases. This flexibility allows homeowners to tailor their solar installations according to their specific energy needs and financial capabilities.
South Africa’s property market is showing signs of increased buyer interest in homes with solar power solutions and a willingness to pay a slightly higher price than similar homes without a solar solution. This trend follows the patterns seen in international markets, where solar-powered homes command a premium in the property market.
Therefore, by investing in solar power, homeowners not only benefit from reduced energy costs but also enhance the overall value and desirability of their properties.
Looking at alternative power from a global perspective, the World Economic Forum reports that renewable energy sources, including solar power, are expected to account for almost 90% of new electricity generation globally by 2026. As such, solar installations are likely to become an increasingly attractive option for homeowners—not just in South Africa, but worldwide.
Furthermore, solar power is environmentally friendly, enabling homeowners to reduce the carbon footprint of their homes and contribute to global efforts in combating climate change. By lowering the demand for fossil fuels and reducing electricity generation from non-renewable sources, solar installations play a crucial role in creating a more sustain-able future.
Getting the most bang for your buck
To maximise the benefits of solar investments, those wanting to install solar should consider their financing option wisely—as well as the size of the installation to maximise electricity generation and comfort.
It is therefore imperative to use a reputable provider and to install a hybrid solution that combines solar panels, a smart inverter, and a battery for efficient energy usage and load-shedding resilience.
The panels must also be installed in the optimal area to get the most sun—for example, a north-facing roof.
The African continent has sunshine all year around, with South Africa itself being above the global solar radiation average. According to the Department of Energy, most areas in South Africa average more than 2 500 hours of sunshine per year, and average solar-radiation levels range between 4.5 and 6.5kWh/m2 in one day.
South Africa therefore has the perfect climate for solar, and as a country we need to move away from our coal heavy electricity production, which is clearly obsolete.
It is clear that investing in solar power can increase the selling potential of homes, and provide long-term benefits. The tax rebate incentive further enhances the advantages of adopting solar energy. By embracing solar power, homeowners can not only contribute to a sustainable future, but also significantly increase the value of their properties.
Despite a big initial outlay of capital, homeowners should maximise their solar investment, in order to get the best possible return on their investment—even if selling is not an immediate consideration. This, coupled with the comfort of a home that can continue to run normally during loadshedding, is invaluable to homeowners and potential buyers alike.
Antonie Goosen is the agent principal and founder of Meridian Realty.
