Financing Options for Installing Commercial Solar Panels in Canberra

 

The Australian government is actively promoting solar power and encouraging its citizens to switch over to renewable solar power by installing residential and commercial solar systems. Although switching to solar power is a beneficial step both environmentally and financially, buying and installing the system is expensive, with the cost going up to $15,000.

Recognizing this limitation, the government-sponsored Clean Energy Council has come up with multiple ways to make residential and commercial solar installation financially viable in partnership with both institutional and private partners, thus encouraging citizens to take the necessary step.

Financing a Solar Power Installation

1. Interest-free loans: Solar suppliers are offering solar loans without charging any interest on the loan. Albeit the cost of the installation might be higher than buying from the suppliers who charge interest. If you want to reap the benefits of solar power energy immediately after installation and without the hassle of paying interest periodically, then the interest-free loan will work for you. You will begin saving on power and the steep electricity bills immediately after the quick transfer of ownership. Under this scheme, the solar installation is also accessible to customers with poor credit scores. 

2. Green loans: Certain institutions are offering personal loans known as green loans that are not secure for customers investing in solar systems and other environmentally friendly products. Green loans have low interest rates and fewer fees in comparison to traditional personal loans. Eligibility criteria for approval of green loans are very stringent, with loans given to those with good credit scores, and thus are offered by very select institutions. Some institutions do offer long term payment options and also waive certain fees. 

3. Adding solar to the mortgage: With the low mortgage rates at present, buying a solar system by mortgaging your house or adding to the existing mortgage makes this a more sensible option to finance a commercial solar installation. Consider the long payment period and the added burden to the on-going mortgage payments before opting for this option. 

4. Personal loan: A safer middle route for financing your solar system, personal loans are pre-approved, and having cash on hand will make negotiating easier when you shop for a solar system for your home or establishment. Moreover, personal loans aren’t limited to solar power and can be used for other needs as well. Some lenders may also give you a better deal when they know the purpose of the loan is for the solar panels. 

5. Leasing a solar system: Under this option, the system is installed upon agreement without any upfront cost, with a fixed amount to be paid in installments every month at often higher interest rates than solar loans. The ownership is not transferred to you until full payment is made, even though you can begin using the solar energy upon installation. Another benefit is the freedom from maintaining the system until the transfer of ownership. Also, if you are moving house, you are obliged to pay the entire outstanding balance before you shift homes. This is the most ideal option for commercial solar systems, as the savings outweigh the interest costs accrued on the installments. 

6. Power purchase arrangement: In this system, the operator installs the panels on your roof for free, retaining ownership of the panels, whereby you buy power from the operator at a lower rate than buying from the grid. Under this system, the customers have to use or store all the power supplied to and bought by them. On days without usage or storage, the excess energy automatically transfers into the grid for a feed-in tariff. This system works better for commercial solar systems than residential systems.

Apart from these options, the government has introduced solar rebates where customers are rewarded for generating their own solar energy. The two available initiatives under the national government's solar rebate scheme are:

• Small-scale renewable energy scheme: Under this scheme, the customers who install the solar system earn a small-scale technology certificate. The calculations for these certificates are based on the estimated amount of renewable energy generated by the system in its lifetime, that is, 15 years. The amount can be adjusted into the cost of the installation by the retailer, or the customer can also choose to sell the certificate for cash in the open market. 

• Feed-in tariffs: This scheme offers a small rebate on the surplus energy not used or stored by the customer, which is then automatically exported to the main electricity grid. The feed-in tariff rates are ascertained individually by respective states as per their policies.