Solar energy is an excellent investment for your home or business, offering a cleaner and more sustainable power source. However, the initial installation cost can sometimes be a hurdle. If you’re facing this challenge, you’re not alone, and that’s where solar financing options come into play.
This article aims to break down how solar financing works, the options you have, and how Arkana Energy can assist you.
Financing is a way to spread out the initial cost of your solar installation over a set period, making it more manageable for your budget. Here’s how solar-specific financing typically works:
Understanding the specific details of solar financing allows you to make well-informed decisions. Remember to include anticipated energy savings and available government rebates in your calculations to get a clearer picture of your loan amount and future repayments.
Solar financing options are varied, each with its own set of advantages and limitations. Here’s a deeper look at what’s available:
By knowing what each type of financing offers, you can select the one that aligns best with your financial situation and your goals for solar energy.
For many, the financial aspect of going solar can feel overwhelming. However, when you break down the numbers, you’ll find that financing a solar system can be a smart move. Here’s a simplified guide to understanding the maths behind solar financing.
|Step 1: Determine Your Solar System Cost
Your first step is to get a quote for your solar system, which will include the cost of the panels, inverter, installation, and any additional components like batteries. Let’s say this comes to $10,000.
|Step 2: Factor in the STC Rebate
Australia’s STC rebate can significantly lower this cost. Imagine you qualify for an STC rebate of $3,000. This brings down the initial cost to $7,000.
|Step 3: Calculate the Loan Amount
With the STC rebate applied, your loan amount becomes the reduced figure of $7,000. This is the amount you’ll need to borrow to finance your solar system.
|Step 4: Understand Interest Rates and Monthly Payments
Let’s assume you secure a loan with a 7% annual interest rate and a 5-year term. Using a loan calculator, your monthly repayments come out to approximately $139/month.
|Step 5: Offsetting Costs with Energy Savings
Your solar system will generate savings on your electricity bill. If your average monthly savings amount to $130, this effectively brings down your out-of-pocket monthly loan payment to just $9.
|Step 6: The Power of Feed-in Tariffs
Some states offer feed-in tariffs for excess energy your solar system feeds back into the grid. If you earn, say, $20 per month from feed-in tariffs, you’re now looking at a net monthly gain of $11 (whilst paying off the loan).
|Step 7: The Long-term View
Over the 5-year loan term, you’d pay back $8,317, including interest. However, if you save $130 per month on energy costs and earn $20 of feed in costs, that’s a total saving of $9,000 over the same period. At the end of the five years you’ve earned $683 and now your system is paid off – meaning monthly energy savings and feed in tariffs going straight into your pocket.
By dissecting the financials in this manner, you’ll see how solar financing is not just doable but also potentially beneficial in the long term.
To qualify for solar financing, you’ll generally need to meet the following criteria:
Meeting these criteria puts you in a good position to secure financing for your solar system.
One of the big decisions you’ll face is whether to finance your solar system or pay cash upfront. Both options have their merits:
Your choice will depend on your financial situation, liquidity, and long-term financial goals. Financing offers a way to enjoy the benefits of solar energy immediately, while paying cash can be cost-effective in the long run.
The most reputable solar providers, such as Arkana Energy, are members of NETCC and are a New Energy Tech Approved Seller. As part of this the finance provided as part of a solar installation must follow the following guidelines:
At Arkana Energy, we’re committed to making your journey to solar energy as smooth and financially viable as possible. We understand that everyone’s financial situation is unique, which is why we partner with a variety of solar-specific finance providers who meet NETCC guidelines and offer competitive interest rates. This approach allows us to present you with multiple financing options, tailored to suit your individual needs and objectives.
In addition to finding you the best financing solution, we also take the hassle out of applying for government incentives. We manage the STC rebate process for you, so you can be sure you’re getting all the financial benefits available to make your solar system more affordable.