Will solar power increase the value of your home and what does going solar mean for homeowners?

As a homeowner in South Africa, you're probably becoming accustomed to the current electricity crisis and how it has affected our daily lives. South Africa is regularly facing Stage 6 loadshedding, and we might even move to stage 8 during the cold winter months. It has become crucial for households to consider alternative energy solutions to keep their homes running.

The upfront investment costs of installing solar panels are very high, so you'll want to be able to recover these costs if you decide to sell your home or at least claim some of the tax back. Here's what you need to know:

The South African government has recently announced a tax rebate for solar installations. South African homeowners can claim a tax rebate of up to 25% of the cost of solar photovoltaic (PV) panels, up to a maximum of R15,000 ($1,000), under a new scheme designed to reduce pressure on the national power grid. The rebate applies only to new and unused solar PV panels with a minimum capacity of 275 W per panel. Qualifying solar panels must form part of a system connected to the main distribution of the private residence and must be installed at a residence that is mainly used by an individual for domestic purposes. The tax benefit will only be available for 12 months, starting from 1 March 2023.

Not only is the installation of solar power a relatively quick and soundless process, but it also has the potential to lower future energy bills and benefit the environment immensely. The only prohibitive for the average homeowner is the upfront costs associated with the installation. Besides the tax rebate incentive, there are now luckily various financing options available to make solar power more accessible and affordable. You can go for an outright purchase and use your own funds, but some major banks now offer to add the cost of installation to your home loan, and subscription services as well as rent-to-own solutions have recently emerged in the market.  

As a homeowner, you may be wondering whether the significant initial financial investment is justified by the long-term value it will add to your home. According to experts, solar panels can increase the value of a property by around 3 to 4%. However, taking into account the current electricity crisis in South Africa, this estimate may be rather conservative. Investing in solar power can be a wise decision for homeowners looking to increase their property's value and appeal. Solar power is a unique selling point (USP) that can distinguish your property from the competition and provide prospective buyers with long-term peace of mind. As we're still experiencing a buyer's market in most parts of the country, homeowners can benefit from making the transition to solar power now while they can afford it. By investing in solar power, homeowners can market the 'peace of mind' that their property offers prospective buyers. In addition, the prospect of lower electricity bills and resilience against unforeseen tariff increases can be an attractive selling point for potential buyers.

Keep these important factors in mind so you can maximise your solar investment:

1. Make sure that you choose your financing option wisely. If you're investing in solar power with the goal of adding to the value of your home, make sure that you choose a financing option that suits your current financial abilities and one that will help you benefit financially in the future.
2. Remember to carefully consider the size of the installation. The more solar panels on your roof, the more electricity can be generated, which will make all the difference in how much comfort you'll be able to sell.
3. Keep in mind that hybrid solutions are the most efficient and save electricity effectively. A hybrid system consists of solar panels, a smart inverter, and a battery. The battery is what keeps your electricity running during loadshedding, using the power generated from the solar panels during non-loadshedding periods.
4. One of the most important decisions you'll need to make is choosing a reputable service provider. Do your research and make sure your provider is accredited and uses the highest quality materials to increase the lifespan of your installation. They should also offer a warranty should something go wrong.
5. Location is key. If your roof is constantly in shade, the solar panels will receive very little sunlight to generate electricity, making a costly installation ineffective. Talk to your service provider about the most efficient location for your installation.

Investing in solar power can increase the selling potential of your home and provide long-term benefits to both the homeowner and prospective buyers. And with the tax rebate incentive, there are even more benefits to consider than just having a source of alternative energy. At Meridian Realty, we encourage our clients to consider solar power as a valuable addition to their homes. With the current electricity crisis, investing in solar power can be a smart decision that can add significant value to your property.

Do you have any questions about the value of your property? Speak to one of our expert property professionals today: https://www.meridianrealty.co.za/contact/