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Thursday, May 30, 2024

How to unlock cash flow by investing in a solar system

With the rising cost of living and Eskom’s tariff increase of 12.74%, getting a solar system is not just about reducing the impact of loadshedding, but to free up cashflow for other household needs.

MJ Davis, CEO of FNB Loans says, “Switching to alternative energy solutions can unlock savings for consumers over the long-term. Individual customers can apply for the FNB Personal Solar Loan Benefit in partnership with National Treasury to enable affordable funding for the purchase of solar solutions at an interest rate of prime +1% which is one of the cheapest rates available anywhere for an unsecured credit product.”

Hybrid system

Over the last 5 years, electricity prices have increased on average 13.82% per annum. If your current average household electricity bill is R2,200 per month.  If similar electricity increases apply over the next 10 years, your electricity bill will be R7053 per month, by 2034.

Based on a household spend of R2,200 per month, a hybrid solar system that costs around R120,000 can generate 650-900kWh per month. A hybrid system in this price range, could reduce your electricity consumption by as much as 75%.  If this system was financed using the FNB Personal Loan Solar Benefit at a fixed interest rate of Prime + 1%, the monthly instalment on a 5-year loan on average would be R3,151. Considering the lifespan of solar system battery is on average 10 years, installing a solar system would not only provide relief from loadshedding it would also save you over R189,000 over a 10-year period. Each household generation and saving will be different based on geographic locations and household consumption.

Solar geysers

A conventional geyser consumes on average 40% of household electricity consumption. In the above scenario, 40% of current spend equates to R880 and that will increase to R2,821 over 10 years. The average cost of a solar geyser with installation is R25,000. The instalment on this amount is R735. This could mean savings from month one.  Assume you reduce your geyser consumption by 75%, over a 10-year period the total saving would be over R107,000.

What are the requirements to qualify for the benefit?

  • The loan amount you take out on your FNB Personal Loan cannot exceed R300 000.
  • At least 90% of the funds from your Personal Loan must be used for solar generation and related costs.
  • The funds must be used for solar panels and other solar related expenses. Solar related expenses can include batteries, inverters, and installation costs. Solar geysers are eligible.
  • Benefit must be activated within 2 months (60 calendar days) after payout on the FNB Personal Loan.
  • As per National Treasury, only one credit product per customer will be allowed to benefit from this scheme. This means if you’ve already taken up a solar benefit credit product with us or with another Bank you will not qualify for this benefit.
  • Customers can apply for an FNB Personal Loan through any of the following channels: FNB App, Online Banking, Branch and or through your advisor.
  • FNB Personal Loan Solar Benefit is located on the FNB App> nav» Energy.

“Investing in a solar system can go a long way for your peace of mind and also makes a lot of sense from a long-term cashflow savings perspective,” concludes Davis.

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