The Solar Geyser and Finances

Marcia asked after my last post if we ever got the Solar Geyser – and yes we did, about 6 months ago.  I do actually want to share this.  As you know I’m a numbers nerd and I love to share financial advice.

We didn’t have R12,500 (after the subsidy) lying around for the solar geyser, who does?  But I worked out a way that we are getting the benefits of the solar geyser and it’s not costing us much at all.  At the time that we got the solar geyser, our average monthly electricity spend was around R770 a month (since then electricity prices have gone up again).  The solar geyser, on average throughout the year, saves you around  40% of your electricity costs, which in our case amounts to R380 a month.  So what we did, is borrow the money from our mortgage, and we pay our R380 “profit” back there, by increasing our monthly mortgage repayments.   The solar geyser will be paid back in four years with the interest rate at 7%, and after that it’s pure benefit on our part.

I see a solar geyser as a type of small business proposition, and the savings as a small profit.  To start a small business, you often need to borrow money, and once you have paid that back, you keep the profits. 

That means that right now, the main beneficiary of our solar geyser is actually the planet and not our bank accounts, but that’s already a good enough reason for me.  In 3 years time we’ll be laughing 🙂  I should also point out that I think you Joburgers would get a far greater benefit from a solar geyser than we do in the coastal areas because you have more sunlight on average than we do.

We are also considering getting a grey water system that will cut our astronomical water bill by probably more than 40%.  We have a veggie patch, and DH waters it every 2 days in summer on a timer.  In winter our water bill is sometimes as low as R20 but in summer it can hit the thousands.  Ridonculous.  The only thing is that I first need to convince DH to use grey water friendly shampoos and shaving creams, because I ain’t eating veggies that have been bathed in chemicals.  It’s a work in progress.

I must also point out that I would never, ever, take money out of my bond to buy something like a car or any other luxury that doesn’t produce “income”.  And if you do, make sure you pay the car back over 3 to 5 years, and not the full 20 to 30 years of the bond, it’s an extremely dangerous trap to fall into.  I don’t care much for cars myself, my personal philosophy is to buy a car you can pay cash for and drive it until it can no longer be repaired.  Very few people truly realise how much their car repayments are eating into their retirement savings.  And the bonus of driving an old skadonkie is that you are far less likely to get hijacked…

Advertisements

5 Comments

Filed under Uncategorized

5 responses to “The Solar Geyser and Finances

  1. Thank you! You know I’m 100% along your line of thinking as far as finances are concerned (I have a money post in mental drafts too). I really want to do it now with these crazy price increases. Last month our bill was R4200, this month R2900 (it’s ridiculous)

    • The way I see it, it doesn’t make (financial or environmental) sense for a single household in South Africa to still be using Eskom to heat their geyser 😉 The sooner you do it, the better. We converted our existing geyser but it has to be a Kwikhot.

  2. Sam

    This is definitely something I want to look into next year when we consider moving house.

  3. To Love Bella

    You missed your calling Mashy! You should be a financial planner!
    I can’t tell you how HAPPY it makes me when I read posts like this where people are so frugal with their earnings – and thinking ahead towards retirement. SO many of our clients are waking up now (aged 40-ish) with insufficient retirement planning because they have seen how their own parents battle.
    I LOVE the idea of a solar geyser! In Durbanville we get crazy-hot beating down sun, so I think we could definitely benefit from it – and our elec and water bills are a bloody childish joke! I think I’m going to discuss this with Travers tonight – THANKS for this post!!
    Our garden is one of those eco friendly ones – mostly succulents. However, our plot is 1500m2, so that’s ALOT of grass – need I say more? And then there’s the pool that needs topping up at least 2x a week, particularly in those steamy hot months.
    *sigh*
    Thank the pope our cars are paid for. One less (painful) expense to worry about. I have to agree with you – cars are a necessity for us, but by golly do they cost money! Maintenance, petrol…. and and and and… Crazy, really.
    More waffling from me. Sorry ’bout that. Again!

  4. Thank you for this informative article!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s