Property trends, just like life, are ever-evolving, but one which experts agree will be huge this year – and grow consistently in years to come, is the demand for green homes.
Homeowners are increasingly investing in off-grid and climate-friendly facilities, and more buyers are placing value on such offerings.
While this is not just being seen in South Africa and is a growing global trend, the constant power outages due to load shedding and electrical faults, plus inconsistent water service delivery in many parts of the country, makes green homes even hotter.
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Some property professionals estimate that investing in certain installations could add up to R1 million to your home’s value.
Thanks to regular load shedding and power failures, Ally Nezar, head of growth at Kandua.com, says solar panels and boreholes are on every homeowner's wish list, and that this trend will not be slowing in 2023.
“Kandua.com’s data shows that solar power and boreholes are increasingly in demand as they enable homeowners to secure their supply of water and electricity.”
The statistics show that bookings for solar power and borehole installation service providers increased by 71% and 60% respectively in the past 12 months.
The company’s architectural technologist Eric Turck adds that most solar energy systems deliver reliable electricity supply for 25 years-plus while ensuring that productivity is retained if you work from home.
“You’ll usually recoup the installation costs in just a few years, and homes fitted with solar technology sell more quickly than homes without alternative power options. This makes solar energy a good investment for homeowners, and one that a growing number of households will make in the New Year.”
Citing Lightstone’s latest estate agents’ survey, Carl Coetzee, chief executive of BetterBond, agrees that increasing number of buyers want homes with solar power and other green features.
“With no end in sight to load shedding, homeowners are willing to invest in homes that offer alternative energy options. Some banks include finance options for solar solutions with their bond offering. So, there is the assurance that while paying off a bond, you are also paying for your solar system which will offer a reprieve from load shedding.”
With Stage 6 load shedding now firmly in effect and the threat of Stage 8 blackouts looming, Grant Smee, property entrepreneur and managing director of the Only Realty Property Group, says it is not wonder that many households are turning to ‘off-grid’ power sources to keep the lights on and return to some semblance of normality.
“Solar power has emerged as the most popular alternative energy option due to its relatively quick installation, soundless efficiency (unlike a noisy generator), its environmental benefits, and the prospect of lower future energy bills.
“However, the upfront costs associated with solar installation may be prohibitive for the average middle-class homeowner, with options ranging between R59 000 to R289 000 according to pricing from solar provider Solana Energy.”
Fortunately, he adds, the the increased popularity of solar power has given rise to a variety of innovative financing options to make it more accessible and affordable. These include:
1. Outright purchase
Buying the system outright using one’s own funds
2. Financing the system
“Some of the major banks now offer the ability to ‘add the cost of solar installation to one’s home loan.”
3. Rent-to-own
Smee says various solar financing companies have popped up in recent years, offering consumers the option to pay a monthly fee for solar, with the understanding that you will own the equipment after a certain period of time - usually five to seven years.
4. A subscription service
“Solar providers such as GoSolr offer a fixed-monthly subscription to solar power using their equipment. Prices generally start at R1 580 per month,” he says.
Long term value
In addition, Smee cites the importance of justifying the significant initial financial investment by considering the value it will add to your home in the long-term.
According to South African home loan experts, ooba Home Loans, solar panels can increase the value of a property by around 3 to 4%.
“Taking into account the current electricity crisis in South Africa and with no long-term solution in sight, I believe that this estimate is actually rather conservative.”
Having such installations on your property gives sellers the opportunity to offer buyers long-term peace of mind, and this is important considering that the majority of the country is still experiencing a buyer’s market, meaning that many well-priced and well-designed homes are sitting on the market for far longer than they usually would, due to an oversupply of homes.
“Solar power is definitely a Unique Selling Point (USP) and a way for sellers to distinguish themselves from the competition. Thus, I would encourage homeowners to make the transition now while they can afford it, as it can be a lifeline should they become financially distressed in the future and need to make a quick sale.”
By investing in solar power, owners are also able to market the ‘peace of mind’ that their property will offer prospective buyers, both in the short and long-term.
“The buyer has the assurance that they will be able to work from home and perform daily household tasks such as cooking without interruption,” Smee says, adding: “Another positive selling point is the prospect of lower electricity bills and resilience against unforeseen tariff increases. Eskom was recently approved to implement an 18.65% tariff hike come April 2023, which is yet another blow to South Africans dealing with interest rate hikes and the rising cost of living. In contrast, most solar providers’ annual price increases are in line with annual inflation, giving consumers the ability to plan and budget accordingly.”
There are, however, factors that homeowners need to consider in order to maximise their solar investments. He outlines them below:
- 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 own the equipment outright. If you’ve opted for the ‘rent-to-own’ (and haven’t completed the contract) or solar subscription option, the new owner will have to carry the costs of the contract.
- Take the size of the installation into account: The more solar panels on your roof, the more electricity can be generated.
- Make sure that you purchase a hybrid solution: A hybrid system consists of solar panels, a smart invertor, and a battery. The battery is what keeps your electricity running during load shedding, using the power generated from the solar panels during non-load shedding periods.
- Choose a reputable service provider: Make sure that your provider is accredited, uses the highest quality materials to increase their lifespan and that they offer a warranty should something go wrong.
- Remember that 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 essentially useless. Solar power has the potential to greatly increase the selling potential of your home, but all factors must be considered to maximise your return on investment.
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