Your Solar Finance Options Explained
July 28, 2022

Solar is one of few home and business investments that will actually give you some return for your money. However, you may still be reluctant to install a solar power system. You may not ready to fork out a chunk of your savings right now, which makes sense. Installing a quality solar system for your home or business can require a substantial initial investment. It pays to seek advice and look into your solar finance options.

Let’s take a look at some of the ways you can pay for your solar without having to dip into your savings. You can start saving on electricity now while keeping your cash in the bank, or you can put that money towards a well-deserved holiday or other home improvements!

Are solar panels worth the cost?

The short answer is yes, definitely! Australia is one of the sunniest countries in the world and, no matter your energy consumption, solar panels are a worthy investment for your home or business. The cost of electricity and gas prices continue to increase and we are paying some of the highest electricity prices in the world. Generating your own free, clean energy from a rooftop solar system has never been more attractive. 

On average, your solar system will pay for itself within 2 to 5 years and can deliver solar savings for decades to come. Installing a good quality solar power system will also increase the value of your home or the potential rental yield as new owners can benefit from the free energy. Use the NRG solar calculator to discover your solar savings.

graph showing annual savings using solar
Source: SolarQuotes

On a bigger scale, installing solar power will reduce your household or businesses’ carbon footprint and help Australia’s transition to 100% renewable energy. There are clear positive financial and environmental benefits to installing solar, making them a worthy investment.

It’s important to note that, like almost everything - from the humble lettuce to the cost of a new car - the cost of solar is on the rise. In 2021, the overall cost of solar increased by as much as 15% as a result of the global solar panel shortage and skyrocketing shipping costs. There’s no better time than now to make the investment and install a solar system to start saving you big dollars.

Despite the EV charger subsidies being scrapped, installing solar or EV chargers in your home is an investment for saving in the future. 

Why choose to finance your solar?

One of the most attractive reasons to finance your solar is that you get to start saving on electricity straight away, and pay off your solar in increments with your power bill savings.

Many customers comment to us that they have the cash, but they are torn between spending it on solar or something else, like a holiday, boat or a new car.

By financing solar, it frees up cash for you to use on those other luxuries. That way, you can have both the holiday and the solar! And once your solar has paid for itself, you will have far more savings in years to come for more holidays, boats and cars.

How does solar financing work?

These days, there are a number of different options when it comes to financing your solar installation.
Just like any other loan, a solar loan or green loan will have a principal amount, an annual interest rate, monthly payment requirements, and a payback period. There are also options for ‘Buy Now, Pay Later’ arrangements, or adding to your home mortgage.

Using finance can be an excellent way to get into solar sooner! Here we explore some of your options to help you find the funds needed to purchase a solar system.

What are your solar finance options?

Buy now, pay later interest free solar plans

Buy Now, Pay Later (BNPL) arrangements, commonly referred to as payment plans, are becoming increasingly popular for a number of reasons. In 2019, Canstar reported that over one year, the number of BNPL transactions in Australia increased by 90%, from almost 17 million to 32 million. A payment plan means you can split payment over multiple instalments of fortnightly or monthly repayments, meaning ‘maybe later’ can be ‘now’!

Brighte solar finance options

Brighte is an Australian Buy Now Pay Later provider for homeowners looking to finance their solar or battery system, hot water system or general home improvements. With Brighte, you can set-up a 48 or 60 month plan with no deposit and no interest for the entire loan duration. Solar is more affordable and more accessible. You can purchase up to $30,000 worth of solar and batteries using this payment plan.

You’ll be paying for your solar with your solar savings! 

NRG Solar is partnered with Brighte to offer our customers an interest-free payment plan to pay for their solar.

Interest free solar plans are a good way to finance your solar for a number of reasons, such as:

  • Rather than borrowing money and owing interest, you make the purchase and pay as you go in instalments
  • Can be a much less daunting option than refinancing
  • Get into solar sooner and start saving on your energy bill
  • Fast application and approval process and easy payment transactions
  • No early exit fees, so you choose to pay it off sooner without penalty.

If it sounds too good to be true, you should also consider the late payment fees incurred when a payment is missed. A late payment fee of $4.99 will be charged if a payment is missed, but these fees are capped at a total of $49.90 in a calendar year. But for those you are on top of their finances, this shouldn’t be a deterrent! 

The BNPL industry is regulated by ASIC, so consumers are given some protection, making it a relatively low risk financing option. For example, Brighte voluntarily joined the BNPL code of practice  and offered their annual late fee cap. The only other fees that you can expect to pay with Brighte is a $1.50/week account keeping fee, and there are no establishment fees.

Green loans

Green loans are another option available to you to help you fund a new solar system. A green loan is a type of credit offered by a financial institution, this money must be used on an approved purchase that the lender deems as environmentally friendly. Green loans often have lower interest rates as an incentive for consumers to make these ‘green’ purchases.

There are a number of lenders who offer green loans to finance your solar, here are a couple:

Commbank green loans

Commbank green loans are available for Commonwealth Bank customers who have an eligible Commbank home loan or investment home loan.

The Commbank green loan can be used on solar (6kW and above)battery (5kW and above) or solar hot water systems.

These loans have a fixed 10 year interest rate of 0.99% p.a.. With no establishment fees, monthly loan service fees or early repayment fees like some other loans or payment plans. Eligible customers can purchase and install up to $20,000 worth of clean energy products for an affordable solar solution.

Plenti green loans

Plenti is the South Australian Government approved lender for solar and battery. Their green loan interest rates start at 6.99% p.a. Plenti provides unsecured loans of up to $50,000 for a period of 1 to 7 years, paid monthly. Borrowers with good credit histories are usually rewarded with better rates. However, you will run into some penalty fees if you wish to pay off the loan early.

Adding to your mortgage

If you have a mortgage, you can add your solar and/or battery investment to your mortgage amount. Essentially, you just pay a little extra on your mortgage repayments over the years.

This option allows you to own the solar system straight away, with the house.

This is could be a good option as it consolidates your liabilities, so you don’t have to manage different streams of payments through different providers, schedules and rates.

solar savings on ipad

So, should you finance your solar?

Using finance can be an excellent way to get into solar sooner while keeping your cash savings in the bank. Start saving on your power bills and get in before solar prices go up again. With interest rates going up, securing finance and locking in a good deal now could end up saving you even more money. 

There are so many options to help you finance your clean energy investments. The best piece of advice we can give is to assess your options, weigh up the pros and cons of each, and consult a professional. 

We want your solar journey to be as easy, seamless and stress-free as possible. That’s why we’re here to help you decide which finance option would be most suitable for you. Plus, we do all the paperwork for you!

Contact us today and we can help you assess your best finance options, so that you can start saving now!

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