The shock of Eskom’s proposed rate hike has prompted South African home-owners to seek a viable alternative – and solar energy is seen as the way to go.
Theo Rutstein, chairman of the Teljoy Group, says that since the publication of the Eskom proposals, his company has been receiving more than 300 enquiries per day.
“Initially people thought it was a good idea to go solar, but few people were prepared to dig into their pockets to pay for it,” he says.
Since Eskom’s announcement that it proposes a 45% compounded increase per annum for the next three years has stirred consumers to action. The realisation that an electricity bill of R1 000.00 per month will increase over the next three years to R3 000.00 per month has motivated consumers to look for methods of saving electricity and the most obvious choice has been solar water heating.
“It is generally recognised that heating water accounts for between 30% and 50% of an average household’s electricity consumption so that the installation of a solar water geyser will effectively offset the proposed Eskom hike,” says Rutstein.
He says his company entered the solar industry nearly two years ago and business was initially slow, despite the fact that most people thought that solar was a good idea, not only in terms of saving money but also because it reduces carbon emissions and is good for the environment.
Teljoy, realising the dichotomy between the desire to install solar and the willingness to pay for it, introduced a Green Credit scheme in terms of which payment for the solar system would be effected over a four-year period and the monthly installments would be offset by the savings in electricity usage.
In terms of this offering, customers are able to install solar systems from as little as R249.00 per month and a down payment of R2 500.00.
The introduction of the Green Credit resulted in a significant increase in business as solar water heating became more affordable.
Rutstein notes that once the Eskom tariff hike goes through, the pay-back period on the solar system will be significantly reduced.
He says: “If the Eskom price hikes of 45% per annum over the next three years are approved, and even if one assumes that there will be no inflation-linked price hikes thereafter, a customer now spending R1 000.00 per month on electricity will save well over R125 000.00 over the next 10 years by installing a solar system now.
“This is based on the assumption that water heating accounts for only around 30% of the household’s electricity bill.”
Rutstein has observed that many of the new customers were people in their mid-to late 50s who will be retiring soon and are concerned about the cost of electricity post-retirement.
“It’s unfortunate that the lifestyle of South Africans is inevitably going to be affected over the next few years because of electricity supply problems. If the Eskom tariffs are not allowed, there will inevitably be power outages which will make life very uncomfortable.
“On the other hand, the higher cost of electricity will also negatively affect lifestyle through a reduction in disposable income. At least the Teljoy Green Credit offering softens the blow by allowing customers to reduce electrical consumption and pay for their solar water geysers out of the savings,” adds Rutstein.