Sunny side of the electricity bill

The realisation that a bill of R1000 per month will increase over the next three years to R3000 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 30-50% of an average household's electricity consumption so that the installation of a solar water geyser will effectively offset the proposed Eskom hike,” said Rutstein.

He said 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.

Green credit card lessens initial outlay

“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 said. The company introduced a Green Credit scheme where payment for the solar system would be effected over a four-year period and the monthly instalments 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 per month and a down payment of R2500. This has 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 payback period on the solar system will be significantly reduced. “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 per month on electricity will save well over R125 000 over the next ten 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 and therefore 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. However, if the Eskom tariffs are not allowed, there will inevitably be power outages, which will make life very uncomfortable,” he concludes.