FNB adds solar loan facility to home mortgages

FNB adds solar loan facility to home mortgages

By Admire MoyoJohannesburg, 27 Mar 2023

Read time 2min 40sec

Big-four bank First National Bank (FNB) today introduced a home solar loan facility for its customers as South Africa continues to suffer electricity shortages.

FNB says customers can now apply for a solar energy loan financed through a new or existing home loan.

As the country continues to battle the energy crisis, businesses and households are resorting to alternative energy solutions such as solar.

FNB explains its loan facility enables customers to apply for a loan starting at R50 000 and going up to 15% of their home’s value, to finance the installation of a solar energy system from a pre-screened list of reputable renewable energy providers.

The customer’s property valuation will be increased to cater for the future installation of the solar energy system, says the bank.

The amount of the solar energy loan will be added to the customer's bond and recorded as a single loan at interest rates that align with their credit profile, it adds.

FNB will pay the deposit directly to the supplier up-front, so the customer will not be out of pocket unless there is a difference between the approved loan amount and the cost of the renewable energy solution selected by the client, in which case the customer pays the difference or selects a more affordable solution.

According to the bank, the new solar energy loan solution complements existing ones, such as the ecoEnergy home loan solution, which was introduced in 2021 and has paid out R970 million to date.

Amid the load-shedding woes, during his State of the Nation Address this year, president Cyril Ramaphosa announced a tax break for the installation of solar panels at places of residence.

Finance minister Enoch Godongwana during the budget confirmed plans to introduce the new tax incentive to help reduce pressure on the grid and ease load-shedding.

Delivering the 2023 National Budget Speech, Godongwana said individuals who install rooftop solar panels will be able to claim a rebate of 25% of the cost of the panels, up to a maximum of R15 000, from 1 March.

Businesses will be able to reduce their taxable income by 125% of the cost of an investment in renewables from 1 March. In addition, changes to the Bounce Back Loan Guarantee Scheme will guarantee solar-related loans for small and medium enterprises.

Meanwhile, FNB also announced today that customers can now access a range of alternative energy and backup power solutions on the FNB app and pay for it over 24 months.

The service is enabled through FNB Connect and customers will soon receive pre-approved offers for these options.

“There is no paperwork, as the entire process is fully-digitised and accessible through the bank’s platform that customers trust. This is an excellent opportunity for customers who may not have the funds available to buy a solution outright for their energy needs,” says FNB.