Expert insights from Rein Snoeck Henkemans, Co-Founder of Alumo Energy
South Africa’s solar revolution is unfolding at pace. Households and businesses, eager to escape unreliable power, are installing systems at record levels. But beneath this booming market lies a growing and largely unpoliced problem – one that has nothing to do with panels or inverters, and everything to do with the contracts that finance them.
According to Rein Snoeck Henkemans, co-founder of solar provider Alumo Energy, the biggest threat facing consumers is contract confusion. Competitors, driven by aggressive customer acquisition, have begun marketing subscription and rental products in ways that blur critical distinctions around ownership. Many South Africans believe they are buying solar assets, only to discover years later that they own nothing.
A central misconception involves subscription-based solar, often presented as a flexible, low-commitment way to go green. The model is typically month-to-month, with enticing early pricing. But Snoeck Henkemans says marketing language often obscures a crucial reality: ownership never transfers. Even after years of payments – often thousands of rands more than the cost of a new system – the customer walks away empty-handed.
Confusion grows when comparing these products to bank-financed solar. Many assume bank loans resemble third-party ownership. They do not. Homeowners in these cases own the equipment outright; the bank simply provides the capital. “The problem,” Snoeck Henkemans notes, “is that the terminology used by different providers isn’t standardised. Consumers think they’re comparing like-for-like, when the models are entirely different.”
The key distinction lies between rent-to-own and subscription. Rent-to-own agreements work like vehicle finance: structured over three to seven years, predictable, and ending in full ownership. Once paid off, the system’s energy is effectively free, and the home or business gains a permanent asset. Alumo incorporates maintenance and insurance into these contracts, a point Snoeck Henkemans says is non-negotiable for genuine long-term value.
Subscription models, by contrast, often exclude maintenance, omit insurance, and rely on escalating annual fees. Over a decade, these increases can turn an initially affordable option into a financial burden. Consumers frequently underestimate the risk because true costs are buried in escalation formulas tied to CPI, prime, or fixed rates – each producing dramatically different totals over time.
Much of the solar industry’s risk lies in the contract. More specifically, in clauses consumers rarely read. Snoeck Henkemans points to the most consequential terms: who pays for repairs, whether the system is locked into proprietary technology, cancellation or early buyout fees, and ownership of exported power. Even system settings can be restricted. Many of these conditions hide deep in the fine print or aren’t disclosed at all. In subscription contracts, the buyout fee alone can exceed the system’s value.
Quality suffers too. Some providers use older or depreciated stock, prioritising energy production over asset value. Warranties, monitoring tools, and upgrade compatibility vary widely. In extreme cases, consumers find they cannot add panels, replace batteries, or integrate with other technologies because the system relies on proprietary components.
Alumo takes a different approach: open technologies and systems designed with future upgrades in mind. But Snoeck Henkemans argues that goodwill alone isn’t enough. Without regulatory intervention, misleading marketing will continue to distort consumer choice.
“There should be no ambiguity in an agreement affecting a household for a decade or more,” he says. Standardised contract disclosures – including clear statements on ownership, escalations, technology limits, maintenance obligations, and termination costs – are essential. Until then, South Africans enter a rapidly expanding market with uneven information and inconsistent terminology.
The solar transition shows no sign of slowing. But unless contracts are clarified, consumers will continue making decisions that undermine the very financial independence they are pursuing. Snoeck Henkemans offers a simple rule: before comparing prices, compare contracts. The monthly fee is only the first chapter; the real story unfolds over the next ten years.
