How to finance going off the grid

With load shedding, more South Africans are finding their own ways to keep the lights on, but at what cost? The financial help available to fund off-grid solutions in the home

After more than a decade of load shedding, more South Africans are looking at off-grid solutions that allow them to carry on with their daily lives. Alternative power comes with a hefty price tag though, but some banks are now offering a range of funding options to lessen the financial blow. We look at what these are and if they are really worth it.

Is going off the grid financially worth it?

The simple answer is yes, but only if you know exactly what you need and whether you’re going to live in your house for a long time. The start-up costs to going off the grid can be expensive, ranging from R150,000 to R350,000. The costs depend on your usage needs, as this will affect what type of off-grid solution you choose, so doing some in-depth research at the outset might save you a fair bit later.

Christiaan Hattingh, managing director of AWPower, suggests starting off with a monitoring system that allows you to get a clearer picture of your energy usage.

‘Our relatively warm and sunny climate makes a home solar system an attractive solution, but completely swopping grid supply for off-grid energy still requires a radical mind shift where households become conscious of how and when they use certain appliances,’ he says.

He goes on to explain that although it sounds great, the reality is that off-grid supply usually has limited output capacity, generating between 5kW and 8kW in a singlestorey home in comparison to approximately 13kW of ondemand grid supply. This means that things like your pool and water pumps, stove, oven, and air-conditioning unit, all of which have high peak power demand, may struggle to function properly on an off-grid supply.

To combat this problem, Hattingh advises homeowners to oversize their off-grid system by double, triple or even quadruple the capacity, but this will obviously bump up the cost.

What are the big banks offering?

After working out which solution works for your needs comes the prickly issue of how to pay for it. If you already have a mortgage on your home, then one obvious solution is to take further financing from it to fund your investment. Given the escalating interest rates, however, this may be a big drain on your monthly expenditure, but savings from a reduced electricity bill could offset some or all of it.

If you go down this route, then Absa and FNB are the best banks to help in increasing the valuation of your property so that it takes your investment in solar into account.

Nedbank also provides the home loan finance option, but has additionally introduced a new asset-backed solar solution. This solution is available to you regardless of who your bond is with, or even if your property isn’t bonded at all. Their partnership with Hohm Energy helps customers assess their energy needs and find the best solution, and provides installation support.

Installation support is also provided by Standard Bank and their Solar Power and Back-up Package, which ranges from R50,000 to R300,000. As part of it, customers get a free Home Power Analysis to get the right size solution, batteries, inverters, and solar panels, which are installed against national guidelines, and come with a warranty, certificate of compliance and a smart app monitoring system. You can purchase the package as a oneoff payment or finance it through a range of options available directly with the bank.

Beware of the additional costs

As well as funding the initial outlay, you want to consider the maintenance costs of your installation and the impact it will have on your home insurance premium.

As a homeowner, it is your responsibility to inform your insurer of any additions you make to your home and ensure that these are covered by your existing policy. In most cases, any installation found inside the home will be covered under your home’s content insurance. Permanent fixtures to the outside of the building, like solar panels for example, will be covered under your building insurance, but the insured value of the building must be increased to account for this.