Green Loans For Solar Power Can Make Solid Financial Sense

SolarQuotes founder Finn Peacock joined Sonya Feldhoff on ABC Radio Adelaide’s Afternoons program yesterday to discuss green loans for solar power systems.

Now is a particularly good time to install solar power for a number of reasons, among them Australia’s solar rebate being even more attractive given high STC values. But not everyone may be comfortable in dipping into their cash buffer.

There is a way to buy solar without spending a significant chunk of change up-front – by using a low-rate green loan from a regulated finance provider that understands the monthly savings solar panels can provide and offers repayments that make installing a system cashflow positive from the get-go.

In his discussion with Sonya, Finn used a South Australian example.

“A typical quarterly electricity bill in South Australia is $500 a quarter. The most popular solar system size in South Australia is 6.6 kilowatts. They start at around, for a good one, $5,000. Now, a 6.6kW solar system for someone in South Australia with a $500 bill before solar, it will take their bill to on average throughout the year of about a $35 credit. So that’s saving you about $535 a quarter.

 

If you were to get one of these low-rate green loans, you could buy that solar system without any cash down, without touching any savings, for about $214 per quarter. So, you’re saving $535 every quarter and it’s only costing you $214 per quarter to buy the system.”

It’s pointed out that the numbers are averages – over winter, the savings will decrease and during the warmer months increase.

“You will be cash flow positive immediately,” says Finn. ” It will be a smaller amount over winter, but it will make up for it over autumn, spring and summer.”

Traps For The Unwary

A few things can throw a spanner in the works; such as paying too much for a system, getting a bad finance deal or buying a crap system and it stops working a couple of years.

“But if you can find a well-priced, good quality system, and a low rate green loan – which generally takes into account you’re buying something that will save you money and so they can do you a good deal there – then it’s very, very compelling.”

You can listen to the full ABC Radio Adelaide Afternoons segment here, (starts just after 1 hr, 4 minute mark and runs for approximately 16 minutes). The segment includes Finn answering questions from the ABC audience – it’s well worth the time to have a listen.

For more information on finance options, check out SQ’s guide to financing a solar power system. You can also see what a system can save you over the various seasons by using the SQ solar calculator.