How much a solar power system can add to your home's value
Category News
Installing backup power equipment like a solar system for your home could increase its value by as much as 8%, and there are several options for South Africans to pay off the costs over time.
This is according to Only Realty general manager Megan Ladbrook, who said the company had seen a substantial increase in prospective buyers specifying their need for a home with a backup power solution.
Referring to stats from South African home loan provider Ooba, Ladbrook said that a solar power installation could increase the value of a property by around 3% to 4%.
"A lot of people are thinking that it might be a little bit more than that and that this is a conservative estimate. It could actually be up to 8%," she said in an interview with CapeTalk.
Ladbrook explained that the current load-shedding scenario in South Africa has made backup power solutions a top priority for prospective home buyers.
"We are finding that for so many people, it is obviously top-of-mind. It's one of the first things that a lot of buyers are asking," she said.
She said installing backup power is one way sellers can make their properties more attractive to prospective buyers.
"Interestingly, a lot of sellers are interested in trying to find ways that they can put their property ahead of the pack, and solar is one of them," Ladbrook said.
"They aren't cheap systems. There are obviously different options for financing, but it's quite an investment for somebody to make, so if you can buy a property that's already got all of those things installed, it is definitely something that buyers are looking for."
When asked if Only Realty is receiving a high volume of calls from prospective buyers highlighting their want for a home with a backup power solution, Ladbrook said there is a "huge push for it".
She said there is a common misconception in South Africa that backup power solutions are only available for outright purchase.
However, Ladbrook highlighted several financing options South African homeowners could opt for to pay for the system over a set period.
"There [are] some interesting financing options that have come to the market recently," she said.
"Banks have now come to the table and are offering the ability that you can add the cost of your solar installation to your home loan."
This lets homeowners select an appropriate system and pay it off through their mortgage payments.
"[There are] some other more creative options like rent-to-own systems, where different solar financing companies have offered consumers an option to pay monthly with the understanding that they will own the equipment after a certain period of time," Ladbrook said.
"That period is usually five to seven years, which is obviously less than your home loan, but it gives you a bit of flexibility especially if you are planning on selling."
She also spoke about rental services like Go Solar, which lets consumers rent backup power equipment from R1,500 a month, depending on the package.
A MyBroadband staff member recently installed a rent-to-own solar system for their home through Alumo Energy.
They selected an intermediate system with a Sunsynk 8.8 kW hybrid inverter, a 5 kWh Freedom Won battery, and 8 x 455W Tallmax solar panels.
The inverter is large enough to allow for easy expansion by adding more batteries and panels at a later stage.
Buying the system outright would cost R163,000. However, Alumo Energy provides a rent-to-own option which worked out to R2,500 a month.
The rent-to-buy option requires a 10% down payment and a monthly payment of 1.528%. Customers can then buy the system after seven years for another 10% of the original cost.
This makes the system more expensive than buying outright. However, it is an excellent option for those who aren't in a position to pay a large sum up-front.
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Author: Myles Illidge
