With yet another Eskom electricity price increase having been approved by NERSA, it might be time for trustees of sectional title schemes or their managing agents to consider installing environmentally friendly systems to heat water and to save electricity in other areas, says Willem le Roux, director of Propell, who provide financing to bodies corporate and homeowners’ associations throughout South Africa.
Installing equipment such as solar panels or heat pumps to heat water, LED lighting or lights with movement detectors for common areas, and other energy saving devices, will contribute to raising the value of units in the scheme. In addition, this will help residents control their expenditure and save on electricity, he said.
Solar panels and heat pumps should reduce a large percentage (around 40%) of the overall electricity bills. These energy saving systems usually pay for themselves within two to five years, after which the residents will continue to enjoy the reduction in their electricity bills each month.
This type of installation is usually considered a special project. Despite the obvious benefits, bodies corporate often postpone special projects due to a lack of funds and a reluctance to raise a special levy to cover the costs. Owners might also be reluctant because it is a large outlay of cash if the job is done without financial assistance but if they have an option of paying it off, it might seem more feasible. In addition, if a contractor is approached with a bulk order, he might be able to offer a discounted price.
“Propell can offer project finance for large projects like this and, because many home owners are now feeling the need to save energy and money, it might be easier to get everyone to agree to it”, said le Roux.
The finance available through Propell will enable the scheme to fund the installation in full and in many cases the monthly saving on the municipal account could cover the repayment instalment each month, he said.
Once the loan is repaid, the saving will help the body corporate’s cash flow and reduce the need for future increases in levies or the need to raise special levies for other projects (i.e. they will be able to “bank” the surplus and build up a reserve fund).
“Propell offers this project finance to assist managing agents and trustees get the job done with minimum fuss and without having any of the trustees sign surety for the loan,” said le Roux. “The facility can remain in place indefinitely and will only incur costs when used. With easy access to funds when needed, the trustees and managing agent are, therefore, able to do their job properly, which ultimately is to ensure the scheme is run efficiently.”