Finance options for installing solar panels at home

Energy from the sun is free but solar panels aren’t. Here are some helpful ways for renters and owners to fund a home installation.

Rooftop solar is a worthy investment that becomes profitable over time, but the upfront costs of the panels and labour can be daunting.

Luckily, there are various finance options for both owners and renters in houses and apartments. Here’s a rundown.

Purchasing panels for your house

The simplest way to fund a rooftop-solar installation is to pay for it in cash upfront. But there are other options available if you’re unable to do so:

Green loans. Several financial institutions offer special loans to fund environmentally friendly purchases such as solar panels. The loans generally have lower interest rates than comparable personal loans, and must be paid directly to your solar retailer. Banks offer these because rooftop solar is considered to be a good investment.
Rent to own. There are retailers who will install rooftop solar for free then charge you a monthly rental fee for a certain period, after which you own the panels. If properly configured, a rent-to-own scheme should leave you cashflow positive immediately: that is, saving more on electricity bills than you are paying on rent. The total cost of your monthly payments over the rental term will be higher than if you purchased the panels outright – the extra cost is, in effect, interest.
Interest-free loans. Some retailers will provide rooftop solar upfront and allow you to pay it off over a period of time with no interest. But there are loan-establishment fees and ongoing admin fees that make this option more expensive overall than if you financed the purchase yourself. Good deals do exist, but it’s worth shopping around.
NSW government interest-free loans. In February 2019, the state government announced the Empowering Homes program, which will offer interest-free loans to households in NSW to install rooftop-solar systems with batteries or to add a battery to an existing system. Loans of up to $9000 per battery system and up to $14,000 for a solar-plus-battery system will be available. The government claims the scheme will assist up to 300,000 households over 10 years.

Adding panels to your rental house

As the economics of rooftop solar become more favourable, more and more investors are installing panels on their rental properties to make them more attractive to tenants. Your landlord may be willing to install rooftop solar – saving you money on your electricity bills – in exchange for a modest rent increase. This would benefit you both financially. Third-party companies such as SunTenants are now popping up to help investors and tenants make the transition to rooftop solar.

If you’re an investor, there’s another option: you could install solar and manage the property’s electricity bills yourself, passing along the energy charges to your tenant while pocketing any money you make from the feed-in tariff. This practice was common 5 to 10 years ago, when energy companies were offering solar customers generous feed-in tariffs.

Solar in larger apartment buildings

Most large apartment complexes install solar to cover electricity charges for the common areas, which account for the majority of the energy consumption in these buildings. Solar for individual apartments can be complicated to administer.

If you’re part of your building’s strata committee, refer to the information in this article to guide you through the steps to install solar. If not, talk to your building’s strata committee about using the building’s capital works fund for solar installation.

What about embedded networks?

Embedded networks are occasionally installed in small, newly built apartment blocks that have a single owner. If the owner installs rooftop solar, this electrical-wiring configuration allows the owner to sell energy to tenants. However, embedded networks can be expensive to configure in large new buildings. And current legislation means these systems are difficult to implement in existing apartment blocks. If you wish to install an embedded network in an existing building, seek advice from a strata lawyer.