South Africans are turning to “solar loans” to install private energy systems at their homes or businesses due to the frequent power outages known as load-shedding, according to FNB CEO Jacques Celliers. He stated that many customers are investing in solar panels and equipment to cope with energy disruptions and are financing these infrastructural adjustments through loans. Standard Bank is also experiencing a similar trend, with customers funding solar-powered systems ranging from R150,000 to R170,000.
The trend follows the announcement of a tax rebate scheme for solar panels in South Africa by Finance Minister Enoch Godongwana. Individuals who install rooftop solar panels from 1 March 2023 will be able to claim a rebate of 25% of the cost of the panels, up to a maximum of R15,000. The incentive is available for one year only to encourage households to invest in clean electricity generation capacity as soon as possible. Eskom board chair Mpho Makwana has also urged homes and businesses to invest in alternative energy technologies.
However, experts have criticized the implementation of the rebate system, suggesting that the government should have completely scrapped VAT on solar installations instead of only offering rebates. Financial planner Paul Roelofse pointed out that those who take advantage of the incentive would only receive their money back in a year when they file their taxes. He also criticized the rebate’s limited scope, which only applies to solar panels despite the many other costs involved in installing a solar energy system. Energy expert Chris Yelland also questioned whether the incentive is sufficient to make a significant difference in the direction of reducing load-shedding.