Aussies are keener on installing solar panels, but how are they paying for them?

For many Aussies, having solar panels installed typically meant lower energy bills. 

But according to a recent survey by SolarQuotes, more Aussies are becoming increasingly aware of their carbon footprint, due to the recent bushfires and, as a result, are making the switch to solar. 

The solar comparison site found that in January, buyer activity spiked by 17% compared to the previous year, while February was even busier with a 26% year-on-year increase. 

The survey also revealed that more than half (65%) of Aussies were considering installing solar panels purely for environmental reasons, the remaining 35% said the choice was financially driven. 

“What the installers are saying to me is they usually see a dip after Christmas, and they haven’t really seen that dip yet. They’ve been starting back after the break flat-out,” said SolarQuotes Founder, Finn Peacock. 

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But while switching to solar can both benefit the environment and your electricity bills, installing solar panels doesn't come cheap. 

According to the SolarQuotes website, a 6kWh system can cost anywhere between $5,000 - $9,000, leading many Aussies to consider alternative financing options, like a green personal loan. 

“Unlike a regular personal loan, green personal loans are specifically designed to be used on eco-friendly purchases, like solar panels or electric cars,” said Mozo Director, Kirsty Lamont. 

“And as a reward for making an environmentally friendly purchase, these loans typically come with lower interest rates, which could potentially save you hundreds in interest, depending on the size of your loan.” 

With that in mind, we decided to put green loans to the test using our personal loan repayment calculator. 

At the moment, there are eight green personal loans in the Mozo database and the average green personal loan rate currently sits at 7.43%. 

So let’s say you decided to borrow $9,000 to be repaid over three years with the average unsecured personal loan rate in the Mozo database of 10.92%. Over the life of the loan, you’d pay a total of $1,595 in interest. 

But if you chose to take out a green personal loan with the average 7.43% rate, your total interest paid would drop to $1,068 - a difference of $527. 

And according to SunWiz Managing Director, Warwick Johnston, despite the upfront cost, the return on on a solar investment can speak for itself. 

“For a system that has a lifespan of 25 years it’ll pay for itself five times over the lifespan,” he said. 

“[Solar panels are] at the point where they’re producing more energy than they need realistically, but there may come a time in 10 years where people get an electric vehicle and they want to recharge it for $0.”

So if you’d like to take your first step toward doing your bit for the environment, head on over to our personal loan comparison tool.