Last updated April 2025
A solar system is a big investment. Understanding your solar financing options can make it more affordable for your household.
There are great rebates and incentives currently available in Australia – below you’ll find solar financing options to help cover the rest of your solar system’s upfront cost.
1. Solar Loans
Banks and lenders across Australia offer loans made for solar and clean energy. These loans help spread out the cost of your solar system over time.
Here’s a breakdown of the main loan types:
| Feature | Green Loan | Home Loan Green Add-On | Personal Loan |
|---|---|---|---|
| Purpose | Eco-friendly purchases | Solar and sustainability home upgrades added to mortgage | Any personal expense |
| Product Eligibility | For specified product types. Often have specified approved products, energy efficient standards and installers. | Must be a homeowner with an eligible mortgage. May have eligibility requirements similar to a Green Loan | No restrictions |
| Interest Rates | Usually lower than a personal loan (green incentives) | Typically matches lower home loan rates | Standard (often higher) |
| Repayment Terms | Short to medium term (1-7 years) | Long term (aligned with home loan) | Short to medium term (1-7 years) |
| Upfront Costs | None or low | Low or none, added to home loan balance | Varies |
Green Loans
- Used to finance solar, batteries and heat pumps.
- Lower interest rates thanks to sustainability support.
- Some are set up so repayments match or are lower than your old power bill.
- May be backed by programs like the Clean Energy Finance Corporation and Plenti.
- Quick access to funds.
- Many have easy online applications.
- Read our blog post on Green Loans for more information.
Home Loan Green Add-Ons
- Add the solar or battery cost to your existing home loan.
- Pay it off over the life of your home loan.
- Often cheaper than a personal loan.
- Great if you’re refinancing or buying a home with solar in mind.
- Quick online application with many lenders.
- Fast funding for green upgrades.
Personal Loans
- General-purpose loans that can cover solar and other home upgrades.
- Typically, higher interest rates than green loans.
- Flexible and easy to apply for.
- Choose any installer or product.
- Ideal if you’re doing other renovations too.
Tips:
- Always compare total loan costs, not just the interest rate.
Ask your bank about green loan deals — you may get loyalty discounts.
2. Buy Now, Pay Later (BNPL) Plans
Some solar companies offer BNPL plans. You get the system now and pay it off in instalments.
These plans often feature:
- Flexible repayments
- Low or zero interest for a set period.
- Fast approvals.
Tips:
- Compare Full Costs, including any fees.
- Read the Fine Print, especially around missed payments.
- Budget carefully: solar lowers your power bill, but you’ll still pay for grid connection.
- Know when the interest-free period ends and what comes after.
- Check for fees if you repay early.
Warning: BNPL can cost more overall. Compare with other options like loans or mortgage add-ons.
3. Power Purchase Agreements (PPAs)
With a PPA, a solar system is installed with no upfront cost. You pay only for the power it makes, usually at a cheaper rate than grid power.
Why it’s uncommon in Australia:
- You don’t own the system.
- 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
Solar leasing is like a PPA. You rent the system and pay a set monthly fee.
Why It’s Uncommon in Australia:
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 have a home loan, using equity or your offset account can be a smart way to fund solar.
Benefits:
- Home loan rates are usually lower than other loans.
- Spread costs over your mortgage term.
Considerations:
- Adds to your loan balance.
- Could extend your loan term.
- Check for fees and make sure it fits your financial goals.
6. Cash Purchase
If you can afford to pay upfront, this gives the best return.
Benefits:
- No loan fees or interest charges.
- You own the system straight away.
- Enjoy quicker savings.
Considerations:
Keep some savings aside for other needs.
How to Choose the Right Finance Option
Pick a finance option that suits your budget and goals.
Consider:
- Total upfront cost now vs. total cost over the loan term.
- Your current electricity bill vs. new combined costs of any repayments.
- Loan terms, conditions, and penalties
IMPORTANT: Always read the fine print. A financial advisor can help you make the best choice.
Beware of ”Interest-Free” Loans
Please note: this is regarding commercial finance providers and NOT Government supported interest-free loan programs.
“Interest-free” sounds good, but it can hide costs.
Hidden charges to look for:
- Marked-up solar prices. (e.g., a $7,000 system might cost $8,500.)
- Setup, processing, or account fees.
- Penalties for early payments or changes.
Tips:
Ask for a full breakdown of costs and compare it with other finance options.
Next Steps
Ready to explore your solar financing options further?
✅ Talk to trusted solar installers and lenders.
✅ Visit our Government Incentives page for current rebates.
✅ Chat with a financial advisor to make sure your choice fits your budget.
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!
Disclaimer:
This is general information only. It doesn’t take your personal situation into account. Please talk to a qualified advisor or your lender before making a decision.
Step 3
