Maximising your home’s value with solar backup solutions

Installing a solar backup solution can increase the value of your home, but only for high-end properties, according to a recent analysis by MyBroadband. The study found that a 4% increase in home value is possible with a solar installation, with a potential increase of 8% for homes valued at R3 million and higher. Only Realty general manager, Megan Ladbrook, stated that South Africans are spending between R180,000 and R200,000 on solar installations. However, it is important to carefully consider the return on investment and not over-invest in the system. The cost of the solar installation is dependent on the system and can range from R70,000 to R200,000. The cost-effectiveness of the installation will also vary based on the value of the home. Find more in the article below. – Carmen Mileder.When it's worth installing a R200,000 solar power backup system.By Myles Illidge.Installing a solar backup solution can be worth it in terms of increasing your home's value, but only for those priced at R6 million and higher, a MyBroadband analysis has revealed..This is based on an approximate value increase of 4%, but this figure could be as high as 8%, in which case homes valued at R3 million and higher would also immediately end in profit..We spoke to Only Realty general manager Megan Ladbrook, who said that from what the company has seen, South Africans are spending R180,000 to R200,000 on solar installations for their homes.."The return on your expenditure, in relation to house price increase must be carefully considered so that you are not over-investing and therefore overcapitalising into the system," Ladbrook said.."It is difficult to give an average as the options of systems vary massively in range, but from what we are seeing, inverter and battery-only options that cover only essentials, are around R70,000 installed with full 'off-grid' solutions coming in closer to R180,000 to R200,000.".However, at an average price of R180,000 to R200,000, the systems likely aren't entirely off-grid and still use Eskom power when solar energy generation is low, or batteries deplete..A completely off-grid solar power system must account for extended periods of little sunshine, increasing the price significantly..Ladbrook previously said that backup power solutions could add 3% to 4% to a home's value but added that the figure could be as high as 8%.."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..MyBroadband calculated the value increase from solar installations for home values ranging from R1 to R10 million..The chart below provides an overview of the cost of installing a R70,000 battery and inverter or R200,00 solar system for your home versus the estimated value increase..We found that when using the least optimistic figure of 3%, installing a R200,000 solar backup would only be worth it for homes valued at R7 million and above..The increase for homes valued from R1 million to R6 million doesn't offset the installation cost. That said, the net gain for homes valued at R7 million would only be R10,000..South Africans can break even on a R200,000 solar installation if their home is valued at R5 million or above, assuming it increases the property's value by 4%..Using the most optimistic figure of 8%, South Africans with homes valued at R3 million or higher see a net gain over the solar installation cost..However, it should be noted that these are simplified calculations based on average figures and the savings realised from a solar solution will likely add up over time through reduced electricity bills..A comparison like this also can't quantify the value of having electricity at home during load-shedding..It should also be noted that the cost of a solar or inverter installation will probably increase for larger, higher-valued houses as they will likely have higher energy requirements..According to Ladbrook, homes with already-installed backup power solutions are often a top requirement for prospective buyers with South Africa's current load-shedding situation.."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.."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 added that homeowners should consider rent-to-own options for solar installations if the outright cost is too daunting.."[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," she 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.".We calculated the net gain or loss homeowners would get from installing a R200,000 solar system for a range of home values. The results are provided in the table below..Gains and losses are highlighted in green and red, respectively. Losses are also indicated with a minus, for the colourblind..Read more:.Blockchain co enabling solar investors 'to essentially become Eskom' – SunCash CEO Ahren PosthumusSA's biggest solar reservoir compared with world reservesHospitals turn to solar power to combat worsening power crisis.Copyright My Broadband 2023

Maximising your home’s value with solar backup solutions

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