Solaray Energy is now 1KOMMA5° Sydney and 1KOMMA5° Melbourne.

background image

5 Ways To Finance Your Solar Power System

Author
Tom Sedgwick
Updated at
Reading time
3 min

When it comes to financing your solar panel installation, there are two popular options available – a solar green loan and an interest-free payment plan. Both options have their advantages and disadvantages, and it’s essential to understand the differences between them to make an informed decision.

First up, a disclaimer. We are a solar power installer, not a bank or financial institution. This page does not offer any financial advice and it is not tailored to your individual circumstances. You should seek independent financial advice before considering any of these options or signing a contract. We will offer advice on the solar system, and provide all the information needed for your chosen finance provider.

A solar green loan is a type of personal loan specifically designed for homeowners who want to finance their solar panel installation. Solar green loans typically have a lower interest rate compared to traditional personal loans, making them an attractive option for homeowners who want to save money on their energy bills.

One of the main advantages of a solar green loan is that you can repay the loan over a longer period, making the repayments more manageable. Additionally, a solar green loan allows you to access a lump sum of money upfront, which you can use to pay for the full cost of your solar panel installation, including any necessary upgrades or repairs.

An interest-free payment plan, as the name suggests, allows homeowners to finance their solar panel installation without paying any interest. Instead, homeowners make repayments over an agreed period, usually 12, 24, or 36 months, with no interest charged on the amount borrowed.

The main advantage of an interest-free payment plan is that it allows homeowners to spread the cost of their solar panel installation over a longer period, making the repayments more manageable. Additionally, an interest-free payment plan can provide peace of mind as you know exactly how much you’ll be paying each month and for how long.

The catch with interest-free is that the company you are purchasing the solar system from is charged a large fee for the interest-free payment plan. This is then passed on to the consumer. Typically the additional fee for buying a solar system on interest-free is around 20% of the purchase price. This is also why you will often be offered a ‘discount for cash’.

When it comes to choosing between a solar green loan and an interest-free payment plan, it’s essential to consider your financial situation and your energy needs. If you’re looking for a longer repayment period and the ability to access a lump sum of money upfront, a solar green loan may be the better option for you. On the other hand, if you’re looking for a more straightforward and manageable repayment plan without having to deal with banks and long application forms, then an interest-free payment plan may be the way to go.

Ultimately, it’s essential to do your research and consider your options carefully before making a decision. A licensed and experienced solar installer can provide you with customised advice and help you understand the pros and cons of each financing option to ensure that you make the best choice for your needs. So why wait? Get in touch with a solar installer today and start saving on your energy bills!

The 5 Main Ways To Finance Your Solar System

Households across Australia are facing rising energy costs, while solar power has never been so affordable. Installing solar panels can reduce or even eliminate your power bills, plus they can supply your home with clean renewable energy for decades.

But as the average system size continues to increase and more than half of installations now include battery storage, many people are now choosing to finance some, or all, of the system. Larger systems cost more money, but they can also save you many thousands of dollars year after year, making it an attractive and safe investment.

Thanks to the current low-interest rates, it’s common for the monthly loan repayments to be less than the benefit of the system, often significantly, especially if you spread the payments out over a number of years.

Let’s have a look at the top 5 ways to finance a solar power system with or without battery storage:

1. Borrowing Against Your Home

When looking at the various finance options available for solar power, borrowing against your house will typically have the lowest interest rate. Comparison rates are at record lows in Sydney, and from what people are saying, appear to be staying low for at least the next few years. Of course, there are a number of variables that will affect your ability to redraw money from your home loan, however, we have found that customers with a redraw facility have little to no problem financing a solar power system this way as long as everything else is in order.

Refinancing or drawing money from your mortgage can involve additional fees, but these will often be much less than other options – including low-interest green loans. This has proven to be a common way for our customers to finance their solar investment, and we suggest you talk with your bank to ensure that you have all the correct information.

2. Green Loans

There are two types of Green Loans:

  • Green loans offered by banks

  • Green loans offered by banks to customers that hold a mortgage with them

  • Green loans offered by finance companies to all homeowners

Green Loans can be an affordable way to pay for your solar power system and is only available for approved products. As a Clean Energy Council Accredited installer, all our systems qualify.

Community First Credit Union

Community First Credit Union offers a competitive green loan product which is one of many green loan options available in the market.

With no upfront deposit, easy monthly repayments and flexible loan terms of 1 - 10 years and a lower interest rate (6.54% variable as at April 2024) than most standard personal loan options, it can make financing your solar or battery installation more affordable.

Many customers these days are choosing to pay part of their installation upfront, and then finance the balance to keep their repayments even lower.

At 1KOMMA5° we allow you to choose your finance option so that you have the flexibilty to pick the loan product that makes the most sense for you.

CommBank Green Loan

CommBank customers with an eligible CommBank home loan or investment home loan can use the CommBank Green Loan to buy a 1KOMMA5° Solar Power System and Battery Storage at the property secured by their existing home loan.

The CommBank Green Loan is an ultra-low, secured fixed-rate loan with no establishment fee, monthly loan service fee or early repayment fee.

Check with your mortgage bank to see if they offer any ultra-low Green Loan products.

Brighte Green Loan

1KOMMA5° offers the option to pay for your solar system with a Brighte Green Loan.

We make financing your 1KOMMA5° installation trouble-free and easy. Once you decide to proceed with an installation, your 1KOMMA5° representative will provide all of the documentation you need to get your loan approved.

Brighte Green Loans can be used to finance 1KOMMA5° systems up to $45,000 over a 6 to 60-month term. Once you have received a referral from 1KOMMA5°, online approval usually occurs within 1-3 business days. Brighte Green Loan has a 0% interest loan. Establishment fee of $75 added to the loan amount. $2.15 per week account keeping fee included in repayments.

To be eligible to apply you must:

  • Be over 18 years old and an Australian resident or citizen

  • Own or be purchasing a home

  • Be employed, self-employed, a self-funded retiree; or is receiving the Government Age Pension

  • Have an Australian driver’s license or Passport

  • Provide two most recent payslips or 90 days of bank statements

There are a number of good, competitive Green Loan providers – ask us about the options available.

For more information, talk to the 1KOMMA5° team today on 1800 640 919.

3. Interest-Free Payment Plan

Interest-free payment plans have become a popular way to pay for consumer goods such as jewellery, electronics, and now solar power systems. Importantly, interest-free does not mean free. There are always costs involved with financing that are typically about 20% of the purchase price.

Interest-free payment plans are a convenient way of financing a solar system to avoid a big upfront cost. It’s also a way to pay for a solar system over time without having to deal with the hassles of banks and long application forms. However, a common mistake people make is thinking that these types of payment plans don’t cost them more money.

The way interest-free payment plans work is that the finance provider charges the installer the interest rates (often up to 20%) and the installer just builds these fees into their costs. This means every customer pays a premium price regardless of whether they are financing or paying upfront.

At 1KOMMA5°, we choose to only pass on interest rates to those customers who wish to finance, which is why we opt for the Green Loan products offered by our finance partners. It keeps the system costs down for everyone – and makes the fees for financing more transparent.

4. Credit Cards and Personal Loans

A number of our customers choose to pay for part (or all) of their solar system with a credit card. Some credit cards offer interest-free periods of up to 12 months or even longer, giving you a chance to pay off the solar system over a period of time without incurring any additional costs. 1KOMMA5° accepts all major credit cards, and we pass on the transaction fee for using the card when paying for the balance of the system (not our initial deposit). This information is available to you in your quotation.

The other option is to take out a personal loan from a lending institution such as a bank or credit union. A brief look at any comparison website will show you that interest rates vary considerably and are dependent on your personal situation such as your credit history etc. Typically a full-doc loan will require a higher credit score but in return, you will get a lower interest rate.

6. The Good ol’ fashioned way

You can pay for a1KOMMA5° system fee-free using a bank transfer. Our banking details are provided in the quotation.

Installing a solar power system for your home is a smart decision. But navigating the process can feel overwhelming. We compile everything you need to know before investing in solar for your home.

This in-depth resource tackles all your solar power questions, from understanding how it works to financing options and maximising system efficiency.

Call us today at 1300 525 451 or fill in your details below to request for a solar and home battery storage quote today to see how much you can save!

Blog

Read more articles from the blog:

0