Solar Finance: Lap Up The Sunshine And Savings

By Nicola Saltman (Senior Environment Officer, on behalf of Waverley Council) on January 29, 2014 in Other

There’s a quiet revolution happening on Australian rooftops, and it’s all about a bit of silicon, some smart technology and the sun.

With rising energy prices biting hard, plus growing environmental gripes related to fossil fuels, more people are choosing solar power for their homes. Over 1 million Australian households have already embraced the idea, with more than 220,000 of these in NSW alone.

The idea is an attractive one. Having your own clean, green power generator means long-term energy bill savings, protection from future electricity price hikes and it can actually add value to your property. Technology has advanced, systems are cheaper and there are still federal government incentives to help bring the prices down further.

Those who are thinking about going solar but don’t have the cash to fork out upfront to buy a system for their roof need not fear – solar leasing is here.

Much like car or equipment leasing schemes, solar leasing allows you to enjoy the benefits of the product without having to lay down thousands of dollars at the outset. In fact, it can mean you pay nothing upfront. You just have to cover a flat pay-as-you go monthly charge. Finance terms can vary from 7 to 15 years depending on the solar provider, after which you own the system and enjoy continued savings on your energy bills, so over the 25-year lifetime of a solar power system, you will be ahead financially.

The added perks include:

• You can actually save money on your energy bills from day one. Companies suggest the lease payments plus energy cost savings from solar will usually mean a smaller total cost than your old energy bill, especially if predictions on energy price rises ring true. You can also opt to pay a deposit upfront that can lower your monthly instalments.
• The panels, installation and ongoing maintenance don’t generally cost you anything, and many companies guarantee their performance, so it’s up to the solar provider to ensure everything is in working order over the life of the lease.
• For businesses and property investors the lease payments are often 100% tax deductible. Plus it’s a no-brainer on the cash-flow front, especially when capital is hard to come by.
• Leasing typically makes it easier to upgrade panels, which is very handy given that technology is advancing quickly.
• It’s a big tick for the environment since it avoids the carbon emissions that come with traditional electricity.

As with anything, there are a few things you should look out for:

• The payoff depends on how much your monthly bills are reduced by the solar power system. Larger consumers that use a decent amount of energy during the day will benefit the most.
• If you sell your house, you might have to pay off the lease before the sale if the purchaser does not want or can’t afford to take on the lease agreement.
• Then there’s the fine print. It’s a good idea to read and understand the terms of the lease contract, including any escalator clauses (which could mean your payments increase over time) and what sort of maintenance and performance guarantees are included.

It’s with good reason that these innovative finance packages have been gaining so much ground overseas. A recent US study showed that leased systems account for over 75% of California’s new residential solar, compared to less than 10% in 2007.

Over the last few years, several companies offering these packages have emerged on home turf. Join the revolution; it’s not too late. In fact, there’s never been a better time. Find out more about solar power at www.waverley.nsw.gov.au/environment/energy_and_climate_change.