Last Updated Mar 1, 2018 · Written by Hannah Fester
As the consequences of greenhouse gas emissions and fossil fuels on our environment become ubiquitous, the everyday homeowner is transitioning into not just a friendly, but an environmentally aware proprietor, with thanks to solar power. Humans’ collective dependence on fossil fuels - such as coal and natural gas - has, over time, had profound and detrimental effects on the environment, seriously jeopardising the sustainability of our planet.
Thankfully, developments in solar powered energy have made it possible for homeowners to reduce their carbon footprint while increasing their environmental sustainability. Embracing solar power helps to reduce your electricity bill drastically too, and with the sun giving us Aussies 10,000 times the energy we actually consume, there is plenty of savings and solar energy to go ‘round. It goes without saying that solar power is an especially large and renewable source of energy of which we should all be taking advantage.
Using solar power through solar panels sits in a wider movement of ‘Going Green’ - a progression toward a more sustainable, renewable, and efficient way of living using natural resources to deplete human’s reliance on fossil fuels. As a result of this movement, there are also now many solar finance options to help those who wish to take a step in this green direction.
The most common way to make your home solar powered is to install solar panels on your roof. Solar panels have become increasingly popular to align with the growing shift in the environmentally sustainable paradigm. The more educated people have become on the effects of using solar energy, the more common solar panels have become, resulting in lower installation costs and more solar finance options. But what solar finance options are there that will help people finance their solar panels without breaking the bank? There are quite a few choices available to help residents become green without the financial stress.
In a bid to entice homeowners to choose solar power and install solar panels in their homes, the Australian government offers solar rebates, subsidies and grants. Australia has launched what they’ve called a Solar Credits program, which is part of Australia’s Renewable Energy Target - an initiative that is pushing for a more environmentally conscious Australia through upfront discounts on your solar panel purchase. The best part about the Solar Credits program is that most Australians are qualified to apply for the incentives, regardless of where you live or the type of dwelling you occupy. Even if you reside in an apartment, there are only a few parameters determining eligibility; the resident must be an owner occupier of a dwelling within the apartment block; the resident must have permission from body corporate; and the resident needs to provide proof that the panels are personally owned. Similarly, even if you live off the grid, out of metropolitan areas, you are still eligible for solar power rebates. In essence, the government is pushing for a nationwide shift toward a greener, cleaner, and more sustainable Australia through the hefty discounts offered from the Solar Credits program.
In some cases, the government rebate from the Solar Credits program isn’t enough to push people to go solar. So, a supplementary offer, another low interest alternative, is to tack on the expense of solar panels onto your mortgage, as your home loan can offer a lower interest rate. Increasing the amount your owe on your home may be the safest financial option, as you continue to pay the standard home loan rate, as opposed to an additional interest rate from a separate solar loan. A solar loan, on the other hand, can put you out of pocket more than if you added the cost to your mortgage. This is because the interest will likely be higher, as a solar loan is not assured by anything as dependable as your home. The main advantage, however, of a solar loan - above all else - is that the approval process is a lot easier, making you a solar panel owner sooner rather than later. You will also likely pay off your solar loan quicker too, as it’s not part of the lump sum of your mortgage. Whether you choose to add the expense of solar to your mortgage or take out a separate loan to finance the cost, it’s best either way to speak to your financial advisor before deciding.
Another option for financing your solar panels is through solar leasing. If solar leasing is a likely option for you, it’s important to remember that this won’t give you ownership of your solar panels. It will, however, alleviate the upfront costs of purchasing your panels. This can be done through the solar installer, where they will install your solar panels for free, with payments made thereafter monthly (or an agreed upon time period), subsequently paying off your panels in stages. The main advantage of choosing solar leasing is that the conservation of the solar panel system doesn’t sit with you, rather the person who installed it. This is a beneficial option for those who are concerned about the cost and upkeep of solar panel installation.
A report from 2015 found that approximately 15% of Australian homes have solar panels, which mean Aussies are already making the conscious effort to go green. It also makes us the country with the highest rate of household solar panel installation in the world. We’re pioneering the way we think about renewable energy, setting an unprecedented example for other countries around the globe. But why are we all getting on the solar energy band wagon?
The positive effects of using solar energy extends beyond our environmental responsibility, let’s be honest. By going green, installing solar panels, adopting the attributes of a solar powered home, we’re subject to greater financial savings. While the initial outlay of solar panels can be costly, it is known that the overall return on the investment is well worth the upfront costs. It’s important to remember though, your solar panels won’t work in isolation without the aid of grid electricity. When solar powered electricity isn’t enough, grid electricity will step in. Similarly, your entire place won’t be able to survive just off solar power alone. So, be mindful that it’s a combined effort of grid electricity and solar energy that will provide the light in your place. Solar energy will, however, drastically reduce the consumption level of grid electricity and in turn, drastically reduce your electricity bill.
Consider the benefits of transitioning your energy consumption from fossil fuel to solar power. Join the Aussies who have already made the change to reduce their carbon footprint by taking the step in the right direction to a cleaner, greener, more environmentally aware planet through the installation of solar panels. Be considerate of what solar finance option is right for you, weighing up the benefits and implications of each.