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    Should we invest in solar power due to load-shedding?

    Dream of cutting ties with the grid. Yes you can, build your freedom in stages. Since 2007, South Africans have been dealing with regular interruptions in the power supply of the national grid. There is no way of knowing when they will be able to have dependable electricity continuously. Some have turned to buying diesel generators to make sure that essential services, such as lights or running water, stay powered, but they can be pricey and damaging to the environment. In 2020, the Covid-19 pandemic made the effects of load-shedding felt even more strongly in homes due to the increase in people working remotely. Therefore, creating a cost-efficient, more sustainable way to combat it in each household is essential.

     

    Solar power is cheaper than ever before, practical, and available

    If you want to have a reliable source of power during load-shedding, you can opt for a battery and inverter system. This system provides power for a few hours before needing to be recharged, and if you do the recharging with grid power, then you will be paying for grid electricity plus extra expense for storing and using the power when the grid fails to deliver. To save you the added cost, it is ideal to invest in photovoltaic solar panels that directly convert sunlight into electricity – this process of conversion can provide power for load-shedding purposes, or you can opt for the complete off-grid choice.

    With recent advanced in technology, solar energy systems are more affordable than ever before, with several financing options available too. Although it can be difficult to figure out the exact amount of power required and what system is the most suitable, with research and expert advice, you can make an informed decision.

     

    Understand your energy use

    To set up a solar installation, it is important to comprehend the energy usage of your home. This will let you decide which solar technology fits your requirements and identify which areas of your household use could be reduced. Could a combination of air fryer, microwave and induction hob be more power efficient than a traditional electric stove and oven? Is it more cost-effective to use a combination of direct solar water heating and instant-heat gas backup than an electric geyser?

    PV solar panels have become more accessible and more cost-effective than ever before. Solar power is the ideal solution for using energy during load-shedding, as opposed to using grid power to charge a battery and inverter system. Investing in solar energy is a wise decision, assuming that one understands their personal energy use and can plan out a system with the right size and budget to meet their needs. To ensure the best results for your system, it is recommended to work with an experienced solar contractor who is accredited with the South African Photovoltaic Industry Association (SAPVIA). Here, they will be able to utilize their knowledge to properly size and design a system that will meet your power needs while giving an optimally efficient return on investment.

     

    Are you a low, medium or high user?

    Your electricity bill will include both the amount of electricity that you use as well as the cost per kilowatt-hour (kWh). If you choose to purchase prepaid electricity, you can calculate your average usage based on the kWh that you have bought during the course of a month. Generally, an electricity bill of around R1 000 is associated with households that use up to 470 kWh per month. Such households are usually composed of two bedrooms or less with no adults aged 50 or older. However, this has changed in the past two years due to many individuals now working from home. Therefore, it is increasingly important to have an economical, dependable power source.

    The average electricity costs for a medium-consumption household, with a 3-bedroom home, 2 to 3 occupants, and someone usually at home during the day, range from R2 000 to R2 500 per month. This type of household typically uses around 970kWh. High consumers, on the other hand, who reside in larger houses with 4 or more bedrooms and multiple people home during the day, along with gardens requiring irrigation and maintenance, can expect to pay R4 500 per month for up to 2 100kWh. Additional appliances, such as underfloor heating, extra fridges, dishwashers, and geysers, may increase electricity usage.

    The following averages display the type of solar necessities for small, medium and large households. Bear in mind that the appliances used for cooking (e.g. ovens and stoves) may also rely on electricity. In order to achieve optimal energy utilization, it may be a good idea to utilize cooking appliances that require less power or to use gas instead. To get an optimal energy plan, it is advisable to consult with accredited SAPVIA installers who use quality products.


    Start with a load-shedding solution

    If you have a budget in mind, you may wish to initially install a system which can fulfill your basic power requirements. With solar panels and batteries, you can upgrade the system to an energy solar conversion. Approximate pricing for a system that will supply power for 2 to 4 hours in a row is R70 000 for low-consuming households, R95 000 for moderate-consuming households, and up to R120 000 for those who use a lot of power, taking into account installation and certification. The battery backup will be connected to the DB board and will guarantee a seamless switch to back-up power whenever the energy grid fails.

    In general, the battery backup should offer enough energy to power your lights, refrigerator, freezer, and crucial sockets. However, keep in mind that the prices quoted are for a battery backup that charges from the grid, not from a solar panel. Heating appliances including ovens and toasters, however, should not be included.

     

    Generate your own power and save up to 95% on your electricity bill

    Investing in solar panels is an excellent way to produce your own energy and cut the cost of your monthly electricity bill. A system’s output is measured by its ‘kilowatt peak’ (kWp), and a 4.8kWp setup can lead to an electricity bill reduction of up to R1 700 a month. For small households, that’s a saving of almost 95%. Medium households can expect to save up to 80%, and large households 45%. Why not add a 10kWh battery backup to really make the most of this scheme?

    The cost of the installation (including backup) will be around R208 000 (or R2 865 each month for a 10-year loan at an 11% interest rate). By securing a loan, and taking advantage of the lower interest rates typically associated with home loans at 7.25%, this monthly cost can be reduced further, to R2 442. These payments can be offset against the monthly savings on the electricity bill.

     

    Establishing energy independence, one step at a time.

    In order to disconnect from the utility grid, you need a solar system set up to generate enough power to satisfy your needs in peak periods, together with a backup battery to provide electricity during hours that are dark. The cost of such a system depends on the size of the household; it could cost approximately R150 000 for a low-consumption household, R250 000 for a medium-sized house, or at least R350 000 for a large household. To subdivide the payment, you could opt for a 10-year loan at 7.25% interest. The monthly payments for the loan would then come up to R1,761, R2,935 and R4,109 in the respective categories.

    When planning to convert to energy independence, your solar contractor can help you come up with various options and the stages in which to add them as your needs grow. Don’t feel overwhelmed because the journey doesn’t have to be taken on all at once – take it step-by-step and scale your system gradually.


    Are the savings worth the cost?

    According to the data in our illustration, transitioning to solar energy can save you no less than R1,700 on your monthly energy expenses instantly. Your loan payments may be slightly more than that, so in the beginning you would be paying higher electricity costs–in exchange for the convenience and assurance of consistent energy availability whenever it is needed.

    Once your system is paid off, though, the electricity it provides is free. That will add up to a massive saving over the years. Depending on how much power you use, doing a full off-the-grid conversion could take between 11 and 14 years before the money you’ve saved equals the cost of the system; the point at which it has paid for itself.

    But consider these important points:

    1. The price of grid electricity rose by almost 356% between 2007 and 2017, while inflation over the same period was 74%. This means that electricity prices have increased 4 times faster than inflation over this period. It’s quite possible that the price will continue to rise at that rate for another 10 or 15 years – so any reduction in the amount of electricity you need to buy from the grid is an important saving.
    2. If you’d started a solar conversion when load-shedding began in 2007, your system would’ve paid for itself already.
    3. If load-shedding should continue or get worse over the next 10 or 15 years, you’ll still be spared the inconvenience, stress and lost productivity caused by power failures while you wait for your solar investment to pay for itself.

    Remember, though, that interest rates may rise during the loan term, raising your monthly payments and increasing the cost of the loan. But even though this means it would take longer before the system has paid for itself, you still end up with a system providing free power, which is a constant saving.


    Using your home loan to finance your solar conversion

    Using your home loan is the most affordable option to pay for your solar installation, as it has lower interest rates than personal loans. Depending on the size of the system you need, your home loan monthly payments could increase by R700 to R2 000. It is worth noting that although the home loan payment could rise, the cutback in your electricity bill would counterbalance this change and not cause too much disruption to your finances. Banks offer 3 ways to pay for your solar installation via your home loan, the first 2 being ideal if you’ve been paying off the loan for some time and have paid beyond the minimum repayment. The revolving excess facility that unlocks any extra funds you’ve put in can be readily accessed by transferring the money through Online Banking or the Banking app into your bank account.

    Your second option is to apply for a facility based on how much of you have paid off your initial debt.

    Your third option is to apply for a further loan on your existing home loan to cover the cost of your solar installation. This involves registering a second bond that gives you the additional funds you need. To qualify for this option, you need to borrow at least R50 000 (varies from bank to bank) and the money must be used to increase the value of your home. The current value of your home must also be higher than the value of your home loan.

    This option is effectively a new home loan, so be aware that bond initiation and registration costs will apply.

    Using your home loan to finance a solar conversion won’t yield savings overnight, but it will in the long run – once it’s paid for, you should have permanent free electricity. Other perks are an uninterrupted power supply and reducing your household’s impact on the environment, lets not forget about mental wellness, the long effects of loadshedding may have an impact on your mental wellness.

    Using your home loan to finance your solar conversion is the most affordable way to pay for your solar installation, as home loan interest rates are lower than personal loans. Remember, once your loan is paid off your electricity is free – meaning you make a saving for life – and it’ll offset the inconvenience, stress and lost productivity caused by power failures. By utilising an uninterrupted power supply, you can reap the benefits of not only reducing your household’s environmental impact, but also taking advantage of cost-saving solutions.

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