Homeowners aiming for the best returns on their property investments should consider switching their geyser to solar energy—this change can lower monthly electricity bills by 40-50%. Hot water is one of the largest costs for an average South African household, making it a smart initial focus.

While many homeowners might prioritize kitchen renovations or adding a new cottage to boost property value, these options may not be the most financially sound decisions.

One of the benefits of converting to a solar geyser is its relatively low cost—around R23,000 for a typical family home. Though it may not significantly increase overall property value, it delivers immediate savings.

Once this transition is made, you might want to think about converting your entire home to solar, suggests Marc du Plessis, Standard Bank’s executive head of LookSee, the bank’s platform for home efficiency.

“Maximizing your home’s return on investment depends on whether you plan to live there for several years or sell it soon,” he notes.

“If you’re considering selling in the next 12 months, investing in a complete solar power system may not be the best option. However, converting your electric geyser to solar can provide quick returns with a minimal initial investment, especially since financing options are available through your home loan or a Standard Bank Energy Loan.”

The chart below shows the potential savings. In many cases, transitioning to a solar geyser covers its costs from day one, with savings being more pronounced in Cape Town compared to Johannesburg.

Estimated Savings from Solar Geysers

Source: LookSee

It’s important to highlight that these conversions can be financed through an Energy Loan or a home loan at an assumed average interest rate of 10.5%. The longer the repayment term, the greater the monthly savings, which can be applied toward the home loan repayment.

“A home is one of the largest investments people make, and its value is often only considered when buying or selling,” Du Plessis remarks.

“Moreover, common suggestions for home investments frequently focus on enhancing property value, which may not yield returns for years, if at all.”

Key Considerations Before Investing in Your Home

The timing and scope of home investments will depend on several considerations:

• If you plan to sell;
• Addressing damage or deterioration;
• Changes in lifestyle needs (like adding an office space); or
• Desiring a specific aesthetic (such as a kitchen remodel).

Full Solar Solutions

Next, evaluate whether to convert the rest of your home to solar.

During the peak load shedding in 2023, reports suggested property values could increase by up to 20% for homes with solar energy. However, since then, research on this topic has been limited, and homeowners are encouraged to maintain more conservative expectations (3-8%).

Recently, real estate agents have informed Lightstone that even in a tough market, “green features” like solar energy and alternative water sources remain appealing (16%) to buyers.

“The advantage of solar installations is that you can realize returns on your investment without having to wait until you sell,” Du Plessis adds.

Though solar installations can be costly, they provide immediate benefits beyond just protection from outages. As a productive asset, they generate instant savings on electricity bills, which rise annually with utility rate increases.

For those planning to stay in their homes for another five to ten years, a solar installation is likely to offer significant returns through both electricity savings and a higher resale value.

Don’t Neglect Home Maintenance

Measuring the ROI for home maintenance can be complex, but it is clear that failing to maintain can lead to significant expenses.

The latest annual report from the Ombud for Short-Term Insurance indicates that 25% of complaints concerned homeowners’ claims being denied due to policy exclusions.

“Most of these claims related to damage from natural events and were declined due to gradual wear, lack of upkeep, and other issues, followed by design or construction defects,” Du Plessis elaborates.

Regular maintenance has numerous financial advantages:

• It protects against significant damage;
• Reduces repair costs;
• Can greatly enhance water and energy efficiency, resulting in savings on household expenses; and
• Well-maintained properties are more attractive to potential buyers and can command higher prices in the real estate market.

Brought to you by LookSee.

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