Exploring finance options that can help you make the switch to solar.
Making the switch to solar isn’t all that complicated, however finances can often become an obstacle. Let’s face it, installing a solar system is a significant investment and though you will see immediate savings it will take a little time to recover the full cost. On the bright side there are a few financing options that you can opt for so that you can have your solar system without burning hole in your pocket. Let’s take a look at what these options are.
- Pay upfront
It’s the most obvious method and not exactly a financial aid,but it deserves a mention. If you have the funds you can pay the whole amount in one go and then sit back and soak up all the benefits your system has to offer.
- Payment plans
Most solar installation companies will allow you to opt for a payment plan, whereby they install your system, usually without a down payment, and you can pay for it later at your convenience. Payments are usually made in installments of a fixed amount over an agreed upon period of time.
- Solar leasing & Power Purchase Agreements (PPA)
To start off, solar leasing and PPAs are not the same thing but work similarly and are often grouped together. Both include the solar system being owned by a third party – even though it is installed on your property – who then charges you for the electricity produced. With a solar lease you pay a predetermined monthly amount whereas with a PPA you pay a fixed price per kWh for power generated.
In both cases, the owner is responsible for monitoring and maintenance of the system. However, you will not receive any financial incentives for using a system as you do not own it. This payment method also raises complications if you intend to sell your home as the lease/ PPA cannot be transferred to the new owner and you will still be on the hook for the payments. They are often preferred for large commercial systems.
- Green loans
Green loans are gaining popularity in Australia and are being offered by numerous financial institutions. They are an unsecured personal loan given to fund the purchase of renewable energy or energy efficient products. You will require a reasonable credit score to be eligible for a green loan, however they often have low upfront fees and a lower interest rate as well.
- Personal loans
Personal loans are easier to obtain and could be a cost-effective way to fund your solar system if you are in a position to pay it off quickly. The good thing about this option is that it ensures that you have cash in hand and gives you the opportunity to source the best solar system at the best price.
- Add to your mortgage
Another option is to combine your system loan with your home loan. If you are open and committed to making regular payments it could be a cost-effective solution. Adding on to your mortgage means you won’t have to pay a fee for taking out a new loan and the interest rate will be much lower.
Ask your installer
When you reach out to a solar installation company for a quote ask them about financing options as well. They should be able to offer you advice on the right course based on your requirements. Full-service companies will offer financial solutions as well through their finance partners, simplifying the process. So go on, don’t let the price of a system keep you from switching to renewable energy. Find a solution that’s just right for you and shine like the sun.
