Finance Options for Solar Power Systems & Batteries

Last updated March 2025

A solar system is a significant investment. Understanding solar finance options in Australia is crucial to ensure solar is affordable for your household.

Whilst we cover available rebates and incentives here, read below to learn about how you can finance the balance of the upfront cost of your solar installation.

1. Solar Loans

Many Australian financial institutions offer loans specifically tailored for solar and renewable energy products. These loans are designed to help homeowners and businesses spread out the upfront cost over time.

Choosing between different loan types can be confusing, so we’ve compared the most common options below:

Green Loans

• Designed for environmentally friendly purchases like solar panels, battery storage, and heat pumps.

• Offer lower interest rates as part of sustainability incentives.

• May be structured so that loan repayments match or are less than your current electricity bills, making the switch to solar budget friendly.

• May be supported by government-backed programs – e.g., Clean Energy Finance Corporation and Plenti.

• Ideal for quick access to funds for dedicated green investments, often with simple online applications.

💡Tips:

• Compare the total loan cost, including fees and charges, not just the headline interest rate.

• Ask your current bank or lender about available green financing options — they may offer loyalty discounts or faster approvals.

2. Buy Now, Pay Later (BNPL) Plans

Some solar retailers offer Buy Now, Pay Later (BNPL) solutions, allowing you to have a solar or battery system installed now but pay for it with smaller installments. These plans often feature:

• Flexible repayment periods, tailored to your financial situation.

• No or low-interest options for a set period, helping you manage costs initially.

• Quick approval processes, making installation faster.

💡 Tips:

• Compare Total Cost: Different BNPL providers offer varying interest rates and fees. Review the total cost of the system with all BNPL charges included—not just the headline interest rate.

• Read the Fine Print: Understand the terms and consequences of missed payments—some providers impose significant late fees.

• Budget carefully: Your electricity bills will reduce with solar, but you’ll still have to pay for your grid connection. Ensure you can afford the additional BNPL repayment schedule to avoid accumulating debt.

• Understand the interest-free period: Some BNPL providers offer introductory interest-free terms. Know when this expires and what the rate will be afterward.

• Check Early Repayment Penalties: Some BNPL plans charge fees for early repayment, which can reduce potential savings.

⚠️Warning: BNPL can seem convenient but may lead to higher overall costs. Always compare the total cost of the BNPL option with other financing methods like green loans or mortgage add-ons.

3. Power Purchase Agreements (PPAs)

A Power Purchase Agreement (PPA) allows you to have a solar system installed on your home with no upfront costs. Instead of purchasing the system, you pay only for the electricity generated, typically at a rate lower than standard grid electricity.

Considerations:

You don’t own the system, so you won’t benefit from the fast payback period many Australian homes achieve with ownership.

⚠️Why It’s Uncommon in Australia:

• PPAs for home solar systems are uncommon in Australia because the upfront cost of solar is relatively low due to the Federal Government’s Small-scale Technology Certificates (STC) incentive. In Australia, PPAs are mostly used for large commercial solar systems (Learn more about PPAs).

4. Solar Leasing

Similar to a PPA, a solar lease allows you to use a solar system without buying it outright. You pay a fixed monthly rental fee to the system owner.

⚠️ Why It’s Uncommon in Australia:
Like PPAs, solar system leasing is rarely used for residential solar systems in Australia due to the upfront cost of solar being relatively low due.

5. Mortgage and Offset Account

If you own your home and have a mortgage, drawing on your equity or using funds from your offset account can be a cost-effective way to finance solar.

Benefits:

• Mortgages offer lower interest rates compared to unsecured loans (e.g., personal or green loans).

• Spread costs over your mortgage term, making repayments more manageable.

⚠️ Considerations:

• Increases your home loan balance, potentially extending the repayment term.

• Review whether adding to your mortgage aligns with your long-term financial goals.

• Drawing on your equity or reducing your offset account balance may come with fees

6. Cash Purchase

If you’re in a financial position to do so, paying upfront for your solar system provides the fastest return on investment.

Benefits:

• No loan fees or interest charges.

• Immediate ownership means immediate savings.

• Quicker payback period compared to financed options.

⚠️ Considerations: Ensure you maintain enough liquidity for other financial needs.

How to Choose the Right Finance Option

Selecting the right option depends on your budget, financial goals, and how quickly you want to repay your investment.

Consider:

• Total upfront cost vs. total cost over the loan term: Don’t focus solely on the interest rate—tally the full repayment requirements.

• Your current electricity bill vs. new combined costs: Compare your current bill with the projected new bill plus any loan repayments.

• Loan terms, conditions, and penalties: Be aware of early repayment fees and penalty charges.

⚠️ IMPORTANT: Always read the fine print and consider consulting with a financial advisor before committing to any financing option.

Beware of Interest-Free Loans

IMPORTANT: This is regarding commercial finance providers and NOT Government supported interest-free loan programs.

While “interest-free” loans sound appealing, they include hidden costs. Here’s what to watch out for:

Common Hidden Costs:

• Higher Product Price: The cost of the solar system may be inflated to cover lender fees. Example: A $7,000 solar system may jump to $8,500 under an interest-free agreement due to provider markups.

• Extra Charges: Look out for recurring fees like:

  • Customer establishment fees

  • Processing fees

  • Revolving credit account fees

  • Collection fees

  • Change of details fees

💡 Tips:

Always request a breakdown of costs to see how the “interest-free” deal compares to other financing options.

Next Steps

Ready to explore your solar financing options further?
✅ Contact reputable solar providers and financial institutions to compare plans.
✅ Visit our Government Incentives page for the latest rebate and support information.
✅ Speak to a financial advisor to ensure the financing option you choose aligns with your financial goals.

Investing in solar is a big step—make sure you’re equipped with the right information to make the best decision for your home and wallet!

IMPORTANT: The information provided on this page is general in nature and does not constitute personal financial advice. It has been prepared without considering your objectives, financial situation, or needs. Before acting on this information, consider whether it is appropriate to your circumstances and seek advice from a qualified financial advisor or your lender.