Note: Solar service not available in the Northern Territory, Tasmania and Western Australia.
What are my options for solar panel finance?
There are several options available to help you finance solar panels, but the best one for you will depend on your personal financial situation. You can choose from the following finance arrangements.
14 labelled "green loans" have emerged in Australia since 2018
Specifically designed to fund the purchase of energy-efficient products such as electric or hybrid cars, energy-efficient air conditioning, solar panels, etc.
Secured or unsecured
Terms ranging from 6 months to 7 years
Flexible borrowing limits based on the items you want to purchase
Allows you to make early repayments without penalty (in many cases)
Often cheaper than other forms of personal loan
What to watch out for
These loans have stringent eligibility criteria, so can be difficult for some applicants to qualify for
Covers the cost of buying home energy systems, such as solar panels, or completing home improvements
Usually have terms of up to 1 year
Allows you to make early repayments without penalty
What to watch out for
Tends to have higher fees than other "green" options
Many finance companies that offer interest-free solar finance also receive a fee, usually between 15% and 25% of the purchase price, from the solar installer – which means you'll typically have to pay a higher retail price to get the system installed
Suitable for
People with poor credit who can afford to make the larger repayments needed to pay off their debt over a shorter period
Added to your existing home loan via a redraw facility
Substantially lower interest rates than you would get through other options
Avoid a range of additional fees that come with setting up a new loan
What to watch out for
Not suitable for borrowers who are not home owners or who do not have existing home loans
If you're the type of borrower who only ever makes the minimum mortgage repayment, the total cost of your solar system when paid off over the length of your home loan term could almost double
Suitable for
Borrowers with outstanding home loans
Borrowers who are committed to paying off their home loan as quickly as possible
Offered by
This will be specific to your existing home loan lender. For more information, visit our green home loans page
Solar lease agreement
Features and benefits
"Rent to own" solar agreements
Under this arrangement, the leasing company retains ownership of the solar system until you have paid it off in full under the terms of the lease
You'll rely on fixed monthly repayments (including interest) to pay off your debt
Solar leasing means you don't have to worry about the maintenance and upkeep of the system
What to watch out for
Borrowers should ensure that they calculate the total cost of repayments before deciding whether this option is right for them
People who lease their solar systems save far less than those who buy them outright or with a loan
You may miss out on federal tax benefits and any local incentives
Suitable for
Anyone who doesn't want to buy a system upfront
Offered by
Various solar installers
Power purchase agreement
Features and benefits
Allows you to get a solar system installed for no upfront cost
You have to agree to buy electricity from the solar company for a fixed term, such as 15 or 20 years
Ownership of the system stays with the solar company
What to watch out for
Ownership of the system stays with the solar company
You are contractually obligated to buy a specified amount of electricity from the retailer, even if you don't need it
Suitable for
Large solar systems in commercial premises
Offered by
Various solar installers
How much do solar panels cost?
The cost of installing a solar power system is influenced by a few main factors:
The size of the system
The solar power rebate that applies
The quality of the solar panels you choose
Installation costs (these can vary based on any constraints or restrictions at your property)
A reasonably sized solar system of 5kW or more could set you back over $6,000. To find out how much going solar could cost you, head to Solar Calculator and calculate the cost of your system.
What is the Small-scale Renewable Energy Scheme?
The Australian Government offers a form of rebate under the Small-scale Renewable Energy Scheme (SRES) to help make it more affordable to install solar power, as well as hydro and wind power. Under this scheme, installing an eligible system allows for the creation of a Small-scale Technology Certificate (STCs). STCs allow you to reduce your electricity bills, as well as your greenhouse gas emissions.
Eligible small-scale renewable systems certificates include:
Solar photovoltaic (PV) panels
Wind turbines
Solar water heaters
Hydro systems
Air source heat pumps
You can receive benefit for your STCs by:
Assigning them to an agent (usually the system installer) in exchange for a discount or delayed cash payment
Selling the certificates themselves
You can sell certificates:
Through the open STCs market with pricing subject to market forces, including;
The amount of renewable electricity the system produces or the amount of electricity consumption it reduces
The climate region where it's installed
Through the STCs Clearing House with the price fixed at $40 per STC, excluding GST.
Home owners, small businesses and community groups are all eligible for this Australian solar panel subsidy and no-one is means tested under the scheme.
How can I compare my solar panel finance options?
Make sure to consider the following factors when comparing your finance options:
Fees. Remember to check the fine print for upfront fees, such as establishment and application fees, as well as any ongoing charges that apply. These can have a big impact on the total cost of finance.
Interest. Compare the interest rates available from different finance providers to find the lowest rate available. Remember to make sure you compare variable personal loan rates with other variable rates and fixed personal loan rates with other fixed rates.
Repayment schedule and amount. How much will the regular repayment amount be and how often do you need to make repayments? What will the total cost be over the life of the loan or lease?
Repayment flexibility. If you come into some extra cash, will you be allowed to make additional repayments without incurring any fees? Can you pay the loan off early without penalty?
Loan amount. Check the minimum and maximum limits that apply to be sure that you can borrow as little, or as much, as you need.
Security. Will you need to offer an asset as security for the loan, or is the finance offered on an unsecured basis?
Quick guide to choosing a solar panel
There are three types of solar system available:
Grid-connected solar systems. Grid-connected systems allow you to avoid energy storage costs by letting you feed the unused energy from your home solar system directly into the power grid. You will then receive a feed-in tariff from your electricity retailer. This also means that you have the flexibility to access traditional power from the grid whenever you need.
Off-grid solar systems. Ideal in remote areas where there are only limited (or even no) utilities available, off-grid systems mean you can completely generate your own power and don’t have to rely on any outside utility provider. However, you will need to cover the extra cost of batteries and/or other energy storage devices, and as storage space is limited, you will often waste unused energy.
Hybrid solar systems. These systems allow you to store the excess energy you create yourself, rather than feeding it back into the power grid. However, they also allow you to access power from the grid in periods of high energy use or when there is limited sunlight available.
To find the best system for you, it’s important to consider a range of factors. These will include where you live, the size of your home, your energy requirements, the tilt of your roof and even the shade around your property.
Once you know the type of system you want, it’s essential to compare all your options to find the best deal.
Are solar panels a good idea in Sydney? Solar panels might be a great idea in Sydney if your property fits the criteria and you are willing to make the investment. Learn more and get a solar panel quote.
Am I eligible for solar panel finance?
To qualify for solar panel finance you will need to be 18 years or older and an Australian resident. After that, eligibility criteria differ depending on the type of financing you choose.
For example, green personal loans are typically only available to borrowers with good credit who want to use the funds to buy an energy-efficient solar system. However, some interest-free finance providers specialise in offering loans to people with bad credit, so it’s essential that you familiarise yourself with all requirements before you apply.
Frequently asked questions
Most lenders prefer applicants with good to excellent credit (typically above 650), but some providers offer solar finance to borrowers with fair or low credit scores. If your credit score is below average, you may face higher interest rates or need a guarantor.
Yes, a few lenders offer solar panel loans to people with bad credit. You may need to show proof of stable income and a manageable level of existing debt. Keep in mind that the interest rate and loan amount might be less favourable than if you had a stronger credit history.
Yes. Depending on your location, you may qualify for federal or state-level rebates through programs like the Small-scale Renewable Energy Scheme (SRES). These incentives can lower the total cost of your system and may affect how much you need to borrow.
Absolutely. Most personal loans for solar can include related expenses, such as solar batteries, installation and system upgrades. Be sure to itemise these costs in your loan application so your lender can assess the full project amount.
Depending on the lender, you could receive your loan funds within 1 to 5 business days after approval. Some online lenders offer same-day funding, while traditional banks may take longer to process applications.
Paying upfront avoids interest charges and means you'll benefit from energy savings right away. However, solar finance allows you to spread out the cost and start saving on energy sooner. The best option depends on your cash flow, energy usage and access to rebates.
Some homeowners choose to refinance or apply for a home equity loan to fund solar panels. This can offer lower interest rates than a personal loan, but it also increases your home loan balance and total interest paid over time.
If your loan isn't tied to the property, you'll still need to continue making repayments after moving. Some buyers may be willing to pay more for a home with solar, but you'll need to check whether your contract allows early repayment or transfer options.
Solar loans for residential use are usually not tax deductible. However, if you use solar power for a business or income-producing property, you may be able to claim depreciation or other deductions. Speak with a tax professional for personalised advice.
Not always. Some lenders offer 100% finance with no deposit, while others may ask you to contribute a portion of the purchase price upfront. Making a deposit can reduce your interest costs and help secure better loan terms.
Tim Falk is a writer for Finder, writing across a diverse range of topics. Over the course of his 20-year writing career, Tim has reported on everything from travel and personal finance to pets and TV soap operas. When he’s not staring at his computer, you can usually find him exploring the great outdoors.
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Bria Horne was a writer for Finder, with a specialist knowledge of personal loans, car loans and business loans. Originally from the UK, Bria has been a professional personal finance writer in Australia for over 2 years. She has an M.A and B.A in Philosophy and Literature from the University of Sussex, and previously worked on the UK’s leading hospitality publication.
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