Queensland’s Interest Free Solar Loan Scheme Is Kind Of Sad

qld interest free loans

The Queensland Government recently confirmed the details of their interest free loan scheme for rooftop solar.  Michael — the guy who does the real writing work on this blog instead of mostly just stringing together old jokes as I do — wrote about this and the conditions that have to be met to qualify for a loan in this article here.

Update 25th January 2024:  The QLD interest free loans scheme for solar and batteries has ended.

I’ve had a look at the details of the scheme and I’m afraid I don’t find it very impressive.  The total cost to the Queensland public will come to a few million dollars and because of this low level of funding the number of available loans will come to less than one per 500 households in the state.

It’s good that the Queensland Government is supporting an energy source that isn’t coal, but they don’t seem to be putting a lot of effort into this.  My impression is they wanted votes for being environmentally friendly during the last election, but now it’s time to walk the walk. Unfortunately they seem to be doing the absolute minimum they can get away with.  In the United States they have a word for this — greenwashing.  But then those Americans have a word for everything.

A Missed Opportunity

The loans are — inaccurately — aimed at lower income Queenslanders but as only about 3,500 loans will be made the total number of people helped will be small.  To me it seems like a missed opportunity.  If the Queensland Government wanted to promote solar and help lower income families but didn’t have the resources to do a proper job, they could have achieved both goals at no cost to the tax payer by simply:

  • reducing the daily supply charges on electricity bills
  • making up for the lost revenue by slightly increasing the price per kilowatt-hour.

Poor people are generally frugal when it comes to electricity use, so supply charges make up larger a percentage of their bill compared to rich energy guzzlers. Reducing supply charges reduces this inequity and encourages the uptake of rooftop solar by improving its economics.  It also provides an increased incentive for improved energy efficiency.  Personally, I think supply charges should be eliminated altogether, but at the moment I’ll take what I can get.  While the Queensland Government might meet some resistance if they took this approach, they have strong armed electricity retailers in the past and I presume they could do it again.

Other options that are available include putting solar on state owned buildings and making solar loans to councils and businesses at the same interest rate at which the state can borrow.

But unbelievably no-one in the Queensland government asked for my counsel, so the soar loans program is what we’ve got.

Solar Now – Batteries Later

The loans for rooftop solar are available now while loans and grants for 500 battery systems and 1,000 combined solar and battery systems will be made available later in the year.

Loan Amounts & Payback Time

The interest-free loans are for up to $4,500, paid back monthly over 7 years with no fees.  If you borrow the maximum your monthly payments will be $53.57.  According to the Queensland Government, the maximum amount is enough to pay for a 3 kilowatt system.  A system this size facing north in Brisbane will generate an average of around 12 kilowatt-hours a day1.  This will save the typical household around $50 a month with the exact amount depending on how much of the solar electricity is self consumed.  As the savings are likely to be around the same as the payments it’s kind of like getting a free solar system after 7 years, which is a pretty good deal if you can get it.

The Loan Conditions

In order to qualify for an interest free loan a household must:

  1. Own a home.
  2. Receive Family Tax Benefit Part B.
  3. Have spent $1,000 on electricity in the past 6 months or $2,000 over the past 12 months.
  4. Show they have some kind of reliable income to pay back the loan.  This includes pensions.
  5. Not receive Queensland’s old 44 cent solar feed-in tariff.
  6. Have it installed by one of only 22 approved installers.

One thing that doesn’t appear to disqualify a household is already having solar.  As long as you aren’t receiving the old 44 cent feed-in tariff it seems there is nothing stopping you from getting a loan to put a second solar system on your roof.  (I am so going to get my parents to apply for this.2)

New Home = No Loan

People often want to buy a new solar system when they build or buy a new home.  But you will have to have lived in your home for at least 6 months before you can get a zero interest loan.

It’s Inaccurately Aimed At Low Income Families

The Queensland Government says the loans will provide…

“…support to households that otherwise would not have access to upfront capital to invest in a solar PV system.”

And they sort of achieve this by only offering them to people that receive Family Tax Benefit B.  But this covers a lot of ground.  This is who the Australian Government’s Department of Human Resources says can get it:

Image: Department of Human Resources

While this can include the very poorest of Queenslanders who make ends meet by stealing birds from spider webs, it can also include households with a total income of up to $127,686, which is the point where Queenslanders start wrapping their vegemite sandwiches in gold foil and drinking XXXX from platinum tinnies.

Only Big Consumers Of Electricity Need Apply

To qualify for an interest free loan, a household must have paid $1,000 in electricity bills over the past 6 months or $2,000 over the past 12 months.  Going by Queensland’s Tariff 11 that comes to 2,310 kilowatt-hours over 6 months or 4,620 over a year.  The is about equal to what the average two person home in Brisbane uses.  The trouble with this requirement is low income homes are often careful with their electricity use and consume considerably less than the average.  This means they may not qualify for a loan that is meant to help lower income Queenslanders.

The environmental benefits of rooftop solar are the same whether self-consumed by the home or exported to the grid. The cynical part of me — pretty much all of me — thinks the Queensland government doesn’t care about those environmental benefits. I think they only allow large electricity users in their scheme to increase the total electricity bill savings they can claim responsibility for.

An Inadequate Number Of Installers

If you want an interest free loan there are only 22 eligible installers in Queensland.  The reason why there are so few looks like an attempt to ensure people will receive high quality installations as all of them are CEC Approved Retailers.  There are about 40 CEC Approved Retailers in Queensland, so I don’t know why only 22 can be used.  Excluding shonky installers is not a bad idea, but I think the Queensland Government has set the bar too high and excluded a large number of installers who do high quality work but aren’t in the CEC Approved Retailer category.

The scheme could result in over $15 million in extra solar installation business in less than a year.  Spread between only 22 businesses that’s a reasonably hefty amount each and it might be fairer to spread that out more evenly.

Funding For Less Than 0.2% Of Queensland Households

While many households won’t meet the requirements to qualify for a loan there is not going to be a shortage of applicants because the funding is so limited.  The total number of available loans comes to less than one per 500 Queensland homes.  The government says around 3,500 interest free loans will be available and there are 5 million people in Queensland in around 1.9 million households.  This comes to about one loan per 540 homes.  So if you want one, you’d better be quick.

Total Cost Is Probably A Few Million

If 3,500 loans are made for the maximum amount of $4,500 then the total loan amount will come to $15,750,000.  At the moment the Queensland Government can borrow money at under 2%.  If an average interest rate of 2% over 7 years is assumed then the total amount of interest will come to around $2,360,000.  This means that with administration costs the entire scheme will probably cost tax payers a few million dollars.  Unless of course they are really bad at administration, in which case it could cost more.

Battery Grants & Loans Don’t Make Sense

The rooftop solar installed with the loans will have a clear environmental benefit, directly reducing the amount of electricity generated from fossil fuels.

Later in the year grants and loans will be made available for home battery systems and for combined solar and battery systems.  If these batteries were being installed where they would assist the functioning of the grid or would be used to help take remote communities off the grid, then subsidizing them through grants and zero interest loans may make sense.

Otherwise, the government is being bloody stupid because in Queensland home batteries are a clear environmental negative that don’t make economic sense. Both of these things could change in the future, but at the moment the Queensland Government is planning to spend taxpayer money in a way that will both harm the environment and make the state poorer overall.  They should be ashamed of themselves because that’s what the Commonwealth Games are for.

Footnotes

  1. This is for a system that doesn’t suffer from significant shade, so don’t go installing them under your macadamias and for god’s sake avoid bunya nut trees.
  2. Actually this won’t work because their electricity bills are so low they won’t be able to get a loan.
About Ronald Brakels

Joining SolarQuotes in 2015, Ronald has a knack for reading those tediously long documents put out by solar manufacturers and translating their contents into something consumers might find interesting. Master of heavily researched deep-dive blog posts, his relentless consumer advocacy has ruffled more than a few manufacturer's feathers over the years. Read Ronald's full bio.

Comments

  1. Bret Busby says

    “There are about 40 CEC Approved Retailers in Queensland, so I don’t know why only 22 can be used.”

    Have you considered/investigated whether, given the nature of government in Australia, these 22 approved retailers happen to be donors to the governing political party?

  2. ‘Greenwashing’? YES, but not as miserly as WA’s main electricity provider actively discouraging tenants (fortunate enough to have solar electricity panels) from benefitting from the 47c Feed-in-Tariff they’re eligible to receive.

    To add insult to injury, lessors are firmly discouraged when attempting to find out whether tenants are, in fact, receiving the FiT(!)

    OK, we accept that the LNP (which introduced this high FiT) _mismanaged_ WA’s economy in so many WAys*, propelling our state into debt; but Labor isn’t helping tenant families by discouraging them from signing on and markedly reducing their power bills.

    * Those of us who argued, throughout the mining boom, that it was foolish of the LNP to rely on mining revenues alone, went unheard. Labor voters, now punished with increased utility charges, will only tolerate this burden for so long! Let’s all hope Ben Wyatt firmly opposes the NEG ‘plan’. Plan?!~

  3. Patrick Comerford says

    Ronald this is one blog you probably shouldn’t have written as you are waffling out of your posterity.. My single mum daughter with two kids under ten earns $50000 a year as a teacher. Her electricity bills are in excess of $600 a quarter. Having been alerted to the scheme by the MC Electrical blog and at my instigation my daughter applied for the loan which has now been approved and has now signed a contract with a CEC approved retailer here in SE QLD for a good quality 4.95kw system. As a large part of her consumption is the 315lt storage HWS running on peak tariffs of 36c/kWh I am confident that the Fronius relay will make a useful impact on reducing her bill. I estimate she will save between $250-300 per quarter. With the $53 per month repayment on the Qld government interest free loan and the $30 a month repayment for her home loan drawdown of $1500 she stands to recoup that in her power bill savings if not end up slightly better off in the short term.
    So thanks to this Qld Labor government initiative she will directly benefit financially, reduce her household emissions, create additional employment and buisiness activity in our region and all you can do is knock it.

    • Ronald Brakels says

      If I complain about the scheme being too small, is that knocking it?

      • I simply have a problem with the Government scheme dictating who can be the installer provided they have the appropriate credentials and what product I can purchase.

        My installer said that the Government tendered for participants [their words not mine] which is interesting given that the Government were not actually buying anything.

  4. It’s a pity both my wife & I work full time jobs and put our child in after school care and daycare 4 days a week before this so we dont qualify for Family Tax B.

    Last year we made the decision to change our house over to LED down lights and install some DC fans. We bought the home a few years ago which has a big 8kw inverter airconditioner which only gets turned on at a last resort on a humid summers day to keep those bills down and jumped energy providers twice to get a better deal.

    Earlier this year the QLD government had a $400 rebate if you bought an energy efficient airconditioner + plus a $100 Panasonic gift card when we purchased certain size panasonic airconditioner so we jumped on that. Helped pay the installer and helped the local economy.

    This year we are going to install a bigger solar system than our 1.25kW system which was on our house when we bought it. It has definately helped self consumption and had a small credit but it all helps. We know short term pain will be long term gain with ROI but I’m doing my but by providing energy as well.

    Look, I have to be grateful at the moment for the Redbate or STC we will be paid when purchasing a solar system.

    Thank you Solar quotes and the team’s great articles! Finn for the book you wrote “The Good Solar Guide”. Great read, good price. Anybody considering buying solar needs to read this book and follow the hints and tips Finn suggests. Thank you.

  5. Hugh Wilson says

    Don’t apply if you want to move from gas to electricity? Thanks for nothing.

    • Ronald Brakels says

      That’s a point I hadn’t considered. While most homes in Queensland are without gas, those with it can be excluded because it keeps their electricity bills down.

  6. Jonathan Prendergast says

    Getting 3kW is like going to Broome for a day trip. You’ve gone to the effort of getting quotes, doing research, organising the loan, you may as well get 5kW which can actually meet loads like hot water, dishwasher etc. It seems the state beurocrats are stuck in 2012 when panels were expensive and 5kW cost $20k.

    Otherwise, it is a good initiative. Many learnings will come from it. And it could be improved or expanded in the future as they learn.

  7. Enphase is not an approved battery storage system eligible under the Queensland Government Grant.

    Not a good idea to introduce another manufacturers product especially where who is responsible for guaranteeing the functionality becomes a blame game.

    I am not sure why the Queensland Government is discriminating against individuals including pensioners based on the technology they choose to install.

    I have written to my Local Parliamentarian and asked him to investigate the reason as to why my application cannot proceed based on the Enphase Battery being installed. It should be noted that I have been invited to sub a quotation from another supplier.

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