Cheapest way South Africans can start waving Eskom goodbye

South African households looking for the most affordable solar and backup power solution can rent a system with minimal or no upfront cost and low monthly subscriptions compared to buying.

There are three main ways to get a solar and backup power system in South Africa.

Firstly, you can buy it with cash or take out a loan to pay it off over time.

A cash purchase is impossible for many considering an entry-level system typically costs around R60,000 to R70,000 when using a reputable installer and components from major brands.

A loan is a long-term commitment and attracts additional fees through interest.

In many cases, households with low to moderate electricity usage will be paying substantially more on their loan instalment than they would be saving on their power bill.

The most affordable option to realise savings in the short term is a solar power system rental, which is effectively a solar-as-a-service package.

Using a rented solar system is like appointing an additional private power supplier to feed cleaner electricity to your home, reducing your reliance on Eskom or your local power utility.

However, instead of buying electricity from a large power station far away from your home, you get private power through solar equipment installed on your premises.

On a monthly basis, solar rental subscriptions are not only the least expensive but include installation fees, municipal approval admin, maintenance, remote system monitoring, and technical support.

In some cases, they may also come with insurance cover for the equipment.

The combination of these services means that households have almost nothing to do in terms of taking care of or managing the system to optimise its benefits.

The main downside to a solar rental is that your subscription fee does not go toward paying off the system — like a rent-to-own or loan payment would.

However, many solar rental providers give users the option to buy the system after a certain period.

Initially, the primary selling point for a solar rental subscription was protection against load-shedding.

However, the pricing of solar equipment has come down significantly over the past two years.

A MyBroadband analysis using systems and pricing from one major solar subscription company — Stage Zero — showed that a solar rental can reduce many homes’ electricity bills, even with monthly consumption as low as 484kWh.

The annual escalations in solar rentals are also linked or close to inflation, while grid prices are increasing at more than double inflation.

That means that households using even less power will be able to save by adding self-generation into their supply mix.

A third option for obtaining a solar power system is a rent-to-own subscription, which combines the management aspects of a rental with the potential of owning the kit after a certain period.

However, in many instances, this either costs the same or is slightly more expensive than paying the system off on loan, depending on the interest rate and instalment period of the latter.

A solar rental package’s contract period is also generally shorter than a rent-to-own product’s.

The table below compares four popular solar rental subscription options in South Africa.