Banking institution Nedbank is exploring financing options for solar photovoltaic (PV) installation for homeowners and has implemented several options for businesses wanting to install solar PV plants.

Nedbank Home Loans strategy head Bruno Ching'andu noted during a November 24 webinar, hosted by the South African Photovoltaic Industry Association, that Nedbank Home Loans is exploring financing for solar owing to it aligning with the group’s strategy and brand positioning.

Moreover, clients are evaluating their home energy options, but do not know who they can trust from the large number of solar vendors; nor how to afford the solution most appropriate to their needs.

The home loans unit is therefore aiming to tackle the rising costs of electricity and give clients control over their energy spend, he said.

He noted that, currently, home owners installing solar do so by paying upfront, with a one-off cost.

However, the unit is exploring a solution of financing such installations through a home loan, with a monthly cost.

Ching'andu said solar already had a value proposition for home owners, mainly, energy independence, a reduced electricity bill and payback within five to six years.

He acclaimed that solar solutions, financed with a home loan, would engender all these benefits, but would also include the added benefit of increased monthly cash flow (when the electricity bill reduces more than the instalment increases).

To protect the brand’s reputational risk and ensure that installers are credible, Nedbank has partnered with South African PV Greencards, which is a safety certificate, a quality assurance standard and a training programme for solar PV installers.

Those installers that are not part of this would be required to undergo a due diligence from Nedbank to ensure their credibility.

Nedbank Home Loans put this financing option up on its website, and was able to achieve 150 leads over the past few months without any advertising, noted Ching'andu.

He said the next step would be for the unit to understand what the growth potential for this solution could be.

Further, it will now begin email marketing for pre-identified clients, and, if the feedback is credible, will bring a more bespoke offering to the market by next year that would create a more sustainable offering for clients, customers and suppliers, Ching'andu informed.

BUSINESS OPTIONS
For businesses looking to implement solar PV, Nedbank Business Branch transformation and sustainability head Mark Boshoff said Nedbank offers term loans, whereby capital is made available from existing client facilities or from fresh loans.

He noted that this was desirable to clients as new loans may be ring-fenced for the specific purpose of the renewable energy funding requirements.

The term is up to ten years, depending on the cash flow models, which is longer than the normal term for asset loans, which is necessary given the longer payback period for solar.

Another option offered for outright ownership is NedBond, whereby finance may be provided through an existing bond over the property where equity is available or increasing the facility.

The period is dependent on the term of the existing bond or renegotiated.