South African solar rental battle — Prices and cancellation fees compared

South African households who are not interested in owning a solar system but want to have power during load-shedding and potentially save on their electricity bills can consider a rental product.

Rented solar power systems often have cheaper monthly payments than when financing the same equipment on a bank loan — even those with specially reduced interest rates.

They are also substantially cheaper than when buying a system on a rent-to-own agreement, which combines the benefits of rental and ownership models.

Solar rental packages effectively provide solar-as-a-service, where the customer is paying for the energy and benefit of having no power cuts rather than the system itself.

When subscribed through a reputable provider, renters can rest assured that their system will be maintained at no additional cost, typically with a service-level agreement in pace that ensure timeous responses to any system issues.

In some cases, the subscriptions also include insurance on the system.

Like with a house or car, the downside to renting is that your subscriptions don’t go towards paying off the capital cost of the system.

However, many solar rental companies offer the option to buy a system outright after a certain period.

The cost of doing so will vary from one provider to the next but is generally based on an estimated value of the system at that point, which will factor in depreciation since it first started operating.

Certain solar rental companies also stipulate the buy-out prices in their contracts.

Therefore, if you change your mind about owning the system at some point during your rental, this will be an option you can consider.

Understand the Ts and Cs

It is important to emphasise that you should carefully peruse the terms and conditions of rental agreements before signing up to any provider.

Aside from buy-out fees, these contracts will include information on early cancellation costs, contract lengths, and other critical information.

We found that solar rental companies generally charge very high cancellation fees to cover the cost of removing the system should you no longer require it.

With one well-known provider — Golsolr — this can be as high as R35,400 for its largest systems.

In addition, many providers also increase their monthly subscriptions every year. This hike can be adjusted in line with inflation or a percentage agreed upon within the rental contract.

MyBroadband also found that the contract lengths varied greatly from one provider to the next.

The table below explains some of the differences in the contracts of three major solar rental companies.

We compared the hardware specifications and prices of rentable solar power systems with varying capabilities from the three providers above and two other major solar rental companies — Metrowatt and Wetility.

Our minimum requirement for the systems was that they had to have solar panels, ensuring at least some electricity bill reductions for their users.

We then defined three main categories of peak solar generation, 2-3kWp, 3-4kWp, and 4kWp or higher.

Overall, Hohm Energy’s Glint subscription seemed to be the most affordable,  while Wetility tended to be the most expensive — at least in terms of monthly payments.

However, the specifications within the categories varied greatly in terms of inverter and battery capacity, so these should also be taken into consideration.

In addition, Metrowatt had a very limited selection of products listed on its website, although it is possible that it might offer more configurations on request.

The table below compares the prices of entry-level, mid-sized, and large solar power system rental packages available from five prominent providers in South Africa.