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4 tips on how to finance Solar power and reduce your cost of living

Updated: Nov 23, 2022

The cost of energy is rising.


Treasury has estimated a 20% increase in the cost of electricity by the end of 2022 alone.


Additional reports from political parties, industry professionals, and journalists have estimated as high as 56% rise in the cost of energy over the next 2 years.


At this rate, solar systems are really starting to pay for themselves. From around $5,000, including government incentives, solar systems have never been more affordable.





We spoke to a number of industry professionals, and shortlisted the ways Australian’s can ease the cost of living by investing in energy efficient infrastructure.



1. Use equity in your home to purchase a solar system


Generally, home loans are at the cheaper end, when it comes to interest rates. At least when compared to credit cards, personal loans, and buy now pay later.


If your home has risen in value, you can use the equity in your home to withdraw cash, and purchase a solar system.

In fact you can electrify your entire house - energy savings can be found in products such as:

  • Solar system - Systems can range from around $5,000 upwards - when you take into account government incentives. Most providers include this in their quotes. Allow more costs for battery storage.

  • Induction cooking - uses around half the energy of fossil fuels

  • Split system air conditioning - use approximately a quarter of the energy required by conventional gas or electric systems

  • Heat Pump water heaters - are similarly efficient, using about a quarter of the energy as opposed to conventional electric systems.



2. Be mindful of FREE financing deals on solar systems


There are a lot of folks being drawn to the ‘no interest’ financing models by some solar companies. More often than not the system will be double the price. To avoid paying more, inform yourself:

  • Get a few quotes - Once you know the size of the system you want (retailers can help with this), compare prices. Usually the ‘no-interest’ deals are far more expensive.

  • Interest free? - Usually too good to be true. The financier may charge a lump sum merchant fee to the solar provider which in turn is passed onto you. So while you won’t pay interest, you’ll pay far more for your system

  • Itemised Quote - If a company is more expensive, ask them to itemise the quote to find out what you are paying a premium for. Is it a better warranty, better quality, larger system, OR are you just paying a massive premium for a salesman to come to your house, and a high upfront cost merchant financier?


These types of loans can be useful for folks with bad credit history, acceptance rates are typically much higher than personal loans.



3. Green Loans


These are unsecured, personal loans but for green things. But how do these stack up to regular personal loans? Canstar did the research, and on average you pay a lower interest rate, and a lower application fee. But not by a great deal.


These loans are ideal if you don’t have the equity in your property, but have good credit and want to pay it off quicker



4. Avoid using credit cards or Buy now Pay later schemes - Other than saving the environment, the whole point of these kinds of purchases is to reduce your cost of living. Not to create more financial stress.


Credit cards and BNPL schemes do the opposite, they are pure evil and there is no use for them other than short term solutions for the disciplined point collectors out there

I’m going to get all ‘broken record’ again at the end of the blog - chat to your broker. They can help you find the most appropriate and cost effective way to bring your home into the 21st century in an effort to avoid these nasty power bill increases.


Some resources to help with your choice (I do not get any kick backs or commissions from any of the below)


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