Are You Planning for a Solar Power System Installation?
If so, let’s explore the options available for financing your solar panel installation!
It is difficult to argue against solar installation with its potential for significant savings. You will be harnessing the renewable energy from the sun and saving money. Instead of drawing all your electricity needs from the grid, or from a generator, your solar installation pays you for excess electricity generated. If you’re off-grid, it offers independence.
That said, a quality solar installation may be expensive for some people but there are options to make it affordable. Affordability largely depends on the type of solar system you choose, whether you are eligible for government incentives or whether you choose to make pay for it upfront or with instalments.
Irrespective of any upfront payments needed, urban or suburban homeowners and businesses across Cairns and Townsville, in Queensland should seriously explore exporting excess electricity generated by a solar power system installation to the grid and take advantage of feed in tariffs. If you’re wondering how to get started, we’ve provided four ways you can plan for your solar installation and the options available for solar panel installation finance.
Self Funded
You can purchase your own solar panel and the system to generate electricity. This is the self-funded option and involves an upfront investment. The costs will cover the entire system. As expensive as the upfront cost may be, you will not have any contracts or other obligations, compared to the other options for financing solar panel installations. You can use solar power and still rely on the grid for additional energy requirements. However, it is possible your energy needs will be met with solar power. Ensure you hire a CEC accredited solar retailer who uses a CEC accredited solar installer such as us. At Greenfield Energy, our Energy Audit will help you diagnose the best system size (and electrical output) for your needs. You can arrange this, here.
With solar installations however, you will need to regularly maintain your system. We assist with any equipment problems that may arise, and remote monitoring as part of our System Monitoring and can recommend a reliable cleaner for maintenance service. Residential customers are able to self-fund solar installations or seek a loan and cover the balance. Below is one of our solar installations in Cairns, Queensland.
Check if you qualify for an Interest-Free Solar Loan
If you are unable to afford the upfront costs, another option is to apply for an interest-free solar loan from the government, or loans offered by financial institutions such as banks. If you qualify for the interest-free solar loan for financing your solar panel installation, there is often little investment upfront after small-scale technology certificates and the $4,500 loan are applied. The solar loan agreement is usually for up to seven years and assuming full payment, you will own the system. You can then make monthly repayments towards the loan. Loans are best suited for people who see the value and (short and long term) savings from getting a solar installation but who are not in a position to pay the costs up-front. This said, you will still be responsible for maintenance and for any repair that may not be covered by the manufacturer’s or our warranty. The interest-free solar loan may make solar installation a reality especially when a large number of PV panels and a larger inverter capacity is required, as seen above and below.
Solar Power Purchase Agreements
Then there are solar power purchase agreements, which for financing a solar panel installation, benefits larger businesses best. You do not have any upfront costs for solar installation in such a scenario. You can choose a provider who will cover costs associated with installation and you will have to pay for the energy you consume. Such solar power purchase agreements often lasts seven to fifteen years. You will have an invoice for electricity drawn from the grid you use, say at night, and a separate invoice for electricity drawn from solar power. However, since you will be reducing your grid power consumption, there will be a savings as solar energy costs less than grid power. These savings can accumulate to be quite substantial. Solar power purchase agreements make more sense for many businesses because the provider is responsible for everything, from the financial investment to the recurring maintenance and repairs. For a commercial business with solar installation on a large scale, loans and upfront financing is usually not possible. This is illustrated in the business below.
Solar Lease
The fourth option is a solar operating lease. You can basically rent a solar power system installation. There are fixed payments but not upfront costs. Such contracts may be for up to fifteen years. You can use grid power and solar energy simultaneously. The switch to solar energy, partially or comprehensively, will immediately reduce your electricity bills. Given the (at times) large capital outlay required for commercial enterprises, these latter options are favoured by small businesses. Even on a smaller scale such as this, a solar installation will be capital intensive and loans are few are far between. Therefore, lease options can be attractive.
Which is the best option?
Payment upfront, an interest free solar loan, a lease or a PPA are four ways that residents and businesses can integrate solar into their lives and to reduce their electricity bills. Payment upfront means that while the burden of finance is directed to you, you will access the most benefits including ownership. You will also be responsible for the maintenance costs. The interest free solar loan is also an option for some residents, however, you will need to qualify based on a set of criteria. While both the Power Purchase Agreement and the solar lease will not involve an upfront outlay or maintenance costs, there are a number of factors to consider for both options in order to gauge the best solution for your home and business.
Our friendly experts can advise you on whether an upfront payment, a loan, the PPA or a lease would be the better option for your circumstances. Call us on 07 4243 3202 or alternatively, use our contact form below, or here, to find out more.
Reducing Maintenance Costs with Feed-In Tariffs
Maintenance is a vital aspect for operating an efficient solar installation but are often subsidised when excess electricity is sold back to the grid. Maintenance involves routine checking and cleaning and we cover more detail in an article written here.
In Cairns, Townsville and most of its suburbs, you can take advantage of feed-in tariffs to sell excess and unused solar power. The electricity generated by your solar power system installation that is unused by you and hence exported to the grid will have feed-in tariffs. This can be an outright profit for the owner of the property that will support your maintenance costs.
These feed-in tariffs are set by the Queensland Competition Authority every year. The current regional rate is 9.369 cents per kilowatt hour.
Therefore, not only will you reduce your electricity bills by switching to solar energy but you can also earn a credit. To get started, complete the form below and one of our team members will be in touch within two business days.