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Getting your home off grid – what it would cost

by | Aug 3, 2022

Getting your home off grid – what it would costAfter 14 years of loadshedding, most households have found some way to make do in the face of intermittent electricity outages, but the latest wave of outages has prompted many people to wonder if they can afford to get completely off grid.

Stage 6 loadshedding had a significant impact on our ability to carry on our daily lives, especially for those who work from home. With no end in sight, and no clear solutions to the problem, many people are looking to install their own backup and power systems so that they can get their homes completely off grid.

A backup system is different from a power system such as a solar energy solution. A backup system would be a battery with an inverter that feeds into your distribution board. The battery would be charged from Eskom electricity.

A solar system without a battery backup system would not provide power during the night and in fact would not work during loadshedding as it would, by law, switch off when there was no AC power.

In order to get off grid, you want to have a hybrid system where you can put both together to effectively generate and store your own electricity.

If you’re thinking about getting your home off grid, make sure you speak to an expert about the correct solution for your household needs. This information is based on an entry-level backup system and renewable energy solution using solar panels.

Shaun Thomas, of Thomas Electrical, that partners with solar solutions company Silver Bullet Solutions, says that before you start putting in alternative power sources, first make sure your home is energy efficient.

Switch to LED light bulbs and if you don’t already have a solar geyser, install a heat pump for your geyser which would reduce the energy required by around a third.

Step one: The backup system for R60 000

Step one on the path to getting off grid is to install a battery and inverter that allows you to feed the battery power into your distribution board. Thomas recommends you opt for a hybrid inverter as this provides you with flexibility to add solar power at a later stage.

A system that produces 5 kWh of power is enough for an energy-efficient three-bedroom home. This would allow you to run your whole house except for major heating appliances and your oven. It can manage efficient essential loads, but it is unlikely to run your oven.

Thomas warns against going for smaller systems which are more likely to trip and fail, as they cannot handle any significant load. A 5 kWh system means that the battery can provide power for 5 000 watts at a time.

Each appliance has an energy rating which will give you an indication of how much power it requires to run. For example, an LED light bulb would use 9 watts of power, your TV 300 watts, your fridge 750 watts and a kettle would use around 3 000 watts. You cannot exceed 5 000 watts at a time, so you could run your kettle on the battery but not when several other appliances are on at the same time.

Thomas recommends investing in lithium batteries. While lead acid batteries are cheaper, they are not efficient and have a far shorter life span. While lithium batteries cost around 50% more, they are more efficient, recharge quicker and have double the lifespan, so they represent a longer-term saving.

Step two: Solar panel system for R70 000

While you can run your home off the battery system using Eskom to power the batteries, increased loadshedding and shorter periods between loadshedding may impact the ability to recharge the batteries.

Going solar has the advantage of cutting your electricity costs and those savings could be used to pay for the system.

To charge your 5kWh system you would require around eight solar panels. This would cost around R70 000 fully installed, although check if this also includes the cost of having an engineer sign off on compliance. The system needs to be recognised by the municipality so make sure you are using a reputable company to install the system.

The total cost for a renewable energy system with battery, inverter and panels will set you back around R140 000.

Getting off grid: how to finance it?

Not many people can afford to cover the costs of getting off grid from their savings. If you have a mortgage, banks are allowing you to take further financing from your mortgage to pay for your energy solutions. Several banks have partnered with renewable/backup energy providers to provide discounts to their customers.

If your mortgage rate is at prime, based on the current prime rate of 8.25%, you would pay around R900 extra in interest on the loan each month. If you aimed to pay off the loan over ten years, then you would have repayments of around R1 700. The reduction in your electricity bill should offset some of these financing costs.

FNB has negotiated a 10% discount on the retail price of energy-saving solutions for FNB and RMB Private Bank customers. These products are also available for sale in the eBucks shop and can be purchased using eBucks or a combination of cash and eBucks.

FNB provides various funding options for existing customers:

  • Make use of the available prepaid funds in your home loan flexi facility or secured facility;
  • Apply for a readvance (at no additional cost);
  • Apply for additional finance on your existing home loan/secured facility and FNB will increase the valuation of your property to allow for this investment in solar;
  • Cede your investment portfolio like shares as collateral for a securities-based loan or secured revolving facility and enjoy quick access to inexpensive funding.

Those who don’t have their home loan with FNB can look into switching to FNB ‒ FNB will pick up the bond cancellation costs and bond registration costs plus reward you with R6 100 back in eBucks that can be utilised towards the purchase of backup energy solutions from the eBucks shop.

Standard Bank offers customers a range of energy solutions as well as financing options through their website LookSee.co.za.

Apart from providing finance via a home loan, Nedbank has introduced a new asset-backed solar finance solution, provided through MFC, which is available to anyone wanting to install a solar energy solution on their property, no matter who their mortgage bond is with, or even if their property isn’t bonded at all.

Nedbank’s solar finance offering doesn’t require applicants to undergo a property valuation, which is typically needed when applying for a readvance or further loan, but it still offers a preferential interest rate.

The bank has partnered with energy partners Hohm Energy, to assist clients through the process of assessing their energy requirements, finding a solution that fits their needs, overseeing the installation, and providing after installation support.

Absa Home Loans customers have various options for accessing funds from their home loan accounts to purchase such solutions, including:

  • applying for equity based on the increased market value of their property through the Further Advance offering;
  • applying for the difference already paid towards the home loan through the ReAdvance offering;
  • accessing pre-paid funds already paid into the home loan through the Flexi Reserve offering.

Absa also offers a unique feature called Multiplan which allows Home Loans customers to structure additional funding over a shorter term to save on interest, while keeping the additional debt as a separate account.

While Capitec does not offer special solar system packages to its home loan clients, they apply a needs-based credit solution. Clients can get up to R250,000 for education, medical expenses, home improvements, or vehicles, with discounted interest rates and over an extended period as compared to a personal loan.

These lower-interest-rate loans are made possible by linking the credit granted to responsible client needs or goals and paying the funds directly to the retailer or service provider.  Through this new approach to needs-based credit, with partners such as Cash Build, all consumers, whether they are a Capitec client or not, are able to purchase solar products and more. This solution can be applied for directly at the partner’s website or store.

Remember to update your household insurance

If you make additions to your home in order to go off grid, you need to inform your insurer and make sure the new systems are covered in your policy.

Freestanding systems can be specified under all-risk insurance, or can be covered under home contents (if it’s not located outside). Systems that are permanently connected to a building will be covered under buildings insurance, but the insured value of the building must be adjusted accordingly.

Any installation must be done according to the manufacturer’s specifications and, where applicable, the relevant building regulations.

Inclusions and exclusions are, in most cases, the same as for all-risk insurance, home contents and buildings insurance, depending on where the system is included or specified. It is however important to get clarity directly from your insurer.

This article first appeared in City Press.

2 Comments

  1. Excellent advise. Much appreciated.

    Reply
  2. From an insurance point of view there are a few permeations to look at, buildings insurance may have limits on power surge cover (probably the biggest risk), contents cover may have the same limitations, and all risk cover is probably best to cover all bases but could be expensive & subject to a higher excess. The best bet is to discuss your specific installation with a competent broker.

    Reply

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Maya Fisher-French author of Money Questions Answered

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