With load shedding now a daily occurrence, Gareth Bailey considers the challenges facing sectional title homeowners wanting to install solar panels.
Given the increased prevalence of load shedding and the expectation that it will at least continue for the next few years, many homeowners are implementing or seriously considering implementing solar-powered inverter systems. Over and above resolving the inconvenience of load shedding by providing uninterrupted power for lighting and essential appliances, solar-powered inverter systems are becoming more popular due to the following factors.
Rising electricity costs:
Electricity prices have been rising steadily over the past few years, including an expected increase of 18,65% this year and a further 12,74% next year.
On March 1, 2023, the government introduced a range of incentives and policies to encourage the adoption of solar power. For private households, individuals who install rooftop solar panels between March 1, 2023 and February 29, 2024 will be able to claim a rebate of 25% of the cost of the panels, up to a maximum of R15 000, which can be used to reduce the tax liabilities of homeowners. The rebate is only available for solar PV panels, and not inverters or batteries as the focus is on the promotion of additional generation.
According to the minister, businesses will be able to reduce their taxable income by 125% of the cost of an investment in renewables for investments brought into first use for the first time between March 1, 2023 and February 28, 2025.
“For a business with positive taxable income, the deduction will reduce its tax liability. For example, a renewable energy investment of R1-million would qualify for a deduction of R1,25-million. Using the current corporate tax rate, this deduction could reduce the corporate income tax liability of a company by R337 500 in the first year of operation,” Treasury said.
The cost of solar power technology has been declining rapidly over the past few years, making it more affordable and accessible for homeowners and businesses. In addition, advances in energy storage technology have made it easier to store excess solar energy generated during the day for use at night or during periods of low sunlight.
There is a global drive around the need to transition to a cleaner, more sustainable energy system, in order to reduce carbon emissions and combat climate change. Solar power is seen as a key part of this transition, as it generates electricity from a clean, renewable source of energy.
While owners of freehold properties outside of estates can make their own decisions regarding such investments, owners in sectional title schemes and within estates will need to obtain permission from their body corporate or homeowners association and comply with any rules or conditions of such approval.
From a sectional title point of view, section 24 of the Act states that owners may alter or improve their sections, as long as they obtain the necessary approvals and do not interfere with the common property or the rights of other owners.
Over and above obtaining consent from the managing body, a few other challenges which may arise when installing solar-powered inverter systems within sectional title schemes or estates include:
Limited roof space: Many sectional title schemes have limited roof space available for solar panels, particularly in older buildings that were not designed with solar energy in mind. This can make it difficult to install enough panels to generate sufficient energy.
Cost: Installing solar panels can be expensive – anywhere between R100 000 and R200 000 – for sufficient inverter power, battery storage and solar panels to provide a large degree of grid-independence for an average home. Economies of scale can be enjoyed among all the owners in a sectional title scheme, but it may be challenging to get buy-in from everyone, particularly if they are concerned about the cost and don’t see the benefits of solar energy.
Aesthetics: Some owners may be concerned about the visual impact of solar panels on the building’s exterior. This may be particularly challenging in heritage buildings or in areas with strict architectural guidelines.
In conclusion, while solar-powered inverter systems are becoming increasingly attractive, they require a significant investment and come with additional potential challenges within sectional title schemes and estates. However, given that load shedding is expected to remain for the foreseeable future, managing entities need to evolve and develop regulations to enable their residents to implement these solutions within their communities.
Over and above the benefits to homeowners, at selling time, green solutions like solar are becoming an increasingly important driver of the price that sellers are able to achieve for their properties.