Earlier this month, WesBank introduced residential solar finance, expanding its product mix beyond vehicle and leisure finance solutions.
This new offering provides personal clients in South Africa with a credit facility to finance the installation of solar solutions at their homes.
Depending on their affordability level and credit score, customers can qualify for WesBank solar finance ranging from R65,000 to R500,000.
“Solar power has become increasingly desirable in South Africa to mitigate the rising cost of electricity, embrace sustainable living, and escape the inconvenience of prolonged power outages,” said Lebo Gaoaketse, head of marketing and communication at WesBank.
Affordability remains a significant barrier for many South Africans looking to install solar solutions. Gaoaketse noted that extending solar finance to private consumers was a logical step, given WesBank’s experience in offering similar solutions to business customers.
WesBank joins several financial institutions in providing solar financing solutions.
Major banks like Nedbank, FNB, Standard Bank, and Discovery Bank have introduced various financing options to help South Africans combat Eskom’s load shedding.
For instance, Nedbank offers competitive solar and backup battery packages through its Avo Solar website, while FNB provides solar energy loans via its “Nav Energy” app feature.
Standard Bank participates in the government’s energy bounce-back loan guarantee scheme, offering loans up to R300,000 with personalised interest rates and flexible terms.
Discovery Bank has partnered with Rubicon to provide solar financing with interest rates starting from prime minus 2%.
Absa offers several financing options for existing home loan customers to support the installation of solar and other load shedding solutions.
Investec offers flexible financing to private banking clients for sustainable energy, technology, and water solutions. Launched in 2022, this standalone product supports the installation of solar panels, battery storage, and water backup systems up to R500,000, with bespoke options for larger needs.
Features include no initiation fee, interest rates from prime, and 60-month payment terms. Clients can choose their own solutions or select from Investec’s curated options, and properties do not need to be bonded to Investec.
Additionally, clients can leverage existing home loan facilities to fund these sustainable solutions.
The financial services group also recently launched ReCharge Rental Solutions (RRS), a solar rental solution to help South African property owners and corporates manage load shedding and rising electricity costs.
It offers flexibility for residential and commercial customers who prefer renting over buying solar systems.
Launched in November 2023, RRS provides a full-service offering, including monitoring, maintenance, and servicing, with rental contracts escalating annually by 6% or CPI.
Residential options include a five-year rental with potential extensions, while commercial offerings include bespoke solutions and a five-year rent-to-own option.
The cheapest residential system starts at R999 per month, and commercial systems range from R2.5 million to R50 million. Customers are responsible for insuring the systems, and the service is available to all, not just Investec clients.
The investment in solar power has led to a significant increase in South Africa’s installed solar capacity, which nearly doubled last year.
According to Eskom data, the country had 5,200MW of private solar systems installed by the end of 2023.
Mybroadband reported that several solar loans with reduced interest rates from major banks are set to expire at the end of August 2024.
These loans, part of the national government’s Energy Bounce-Back Loan Guarantee Scheme, aimed to incentivize banks to drive the installation of an additional 1,000MW of private solar capacity within a year.
Despite criticisms, the initiative contributed to a significant increase in private solar capacity, improving Eskom’s operational capability.
Standard Bank said this week that homeowners now have an extended opportunity to benefit from its LookSee low-interest Solar Loan, which will be available until February 2025.
This loan, part of the government’s Energy Bounce Back Loan Guarantee Scheme, aims to help households and businesses adopt solar power to address the energy crisis.
Marc Du Plessis, LookSee’s executive head, praised the loan as a game-changer, offering low-cost finance for solar installations without relying on home loans.
Interest rates start at Prime plus 1% and are capped at Prime plus 2.5%, significantly lower than the maximum Prime plus 17.5% allowed by the National Credit Act.
The Solar Loan, ranging from R3,000 to R300,000 with flexible repayment terms of 1 to 5 years, can finance various installations, provided they include at least one solar PV panel.
This includes converting electric geysers to solar power, though traditional solar geysers are not eligible.
Additionally, LookSee has introduced a new Energy Loan to finance backup power and energy-efficient solutions like battery systems, heat pumps, smart-geyser devices, and gas geysers.
This loan caters to those who cannot install solar panels due to space or permission constraints.
Homeowners can access up to R300,000 with repayment terms up to six years and interest rates capped at Prime plus 6.5%.
Report
Discovery launched its renewable energy platform, Discovery Green, last year. The platform, set to deliver electricity by 2026, will use a wheeling process to transfer energy from optimal wind and solar locations through Eskom’s national grid.
A recent report by Discovery Green reviewed five common renewable strategies, such as rooftop solar and wheeled wind generation, highlighting their financial benefits and risks.
The report noted that businesses often over-invest in solar power, leading to higher costs due to mismatched energy generation and consumption, especially for night-time use.
It warned that businesses procuring too much solar could see their long-term energy costs increase by more than 50%.
Andre Nepgen, head of Discovery Green, explained that unlike traditional coal-generated electricity, renewable energy charges for what is generated, not what is used. This can result in higher costs if energy procurement is not carefully managed.
Discovery Green aims to provide a balanced approach by connecting businesses to affordable renewable power from utility-scale plants.
By procuring 400MW to 1GW of wind and solar energy from independent producers, the platform seeks to boost South Africa’s energy infrastructure and help businesses manage costs while reducing their carbon footprint.
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