How you might save money on solar panels with a green loan

By Tara McCabe · · 4 min read
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Home next to bushland with solar panels on the roof.
Photo by Vivint Solar on Unsplash

For many the barrier to installing solar panels is price - pure and simple. Of course the irony is that if you can afford the initial outlay, having solar panels is actually a money saver. 

Let’s look at an example of this: Rob who lives in NSW could save just under $1,000 a year by switching to solar*. In ten years the savings could be nearly $10,000! That estimate is from a rough calculation taking into account Rob's:

  • postcode
  • the quoted cost of a 3.3kW system
  • the direction his house faces
  • how much his energy provider charges per kWh
  • an estimate of how much he pays for energy in a year
  • the average feed in tariff rate (16c according to SolarQuotes)

Use SolarQuotes' calculator to work out a rough estimate of how much you could save in energy bills.

A green personal loan, the pros and cons

Of course, while the savings are nothing to be sniffed at, shelling out $5,000 to $10,000 in one go simply isn’t an option for a lot of people. If that is your current situation then you might have considered a personal loan.

Before we go any further, let's have a quick look at the pros and cons of taking out a 'green personal loan.'

Infographic reads: Pros and and cons to taking out a green personal loan

As mentioned above, green personal loans often come with lower interest rates. This is a sort of incentive on the lender's behalf for you to buy or invest in something more sustainable.

To illustrate this we can look at a few interest rate averages, based on information in the Mozo database. So right now the average interest rate for a standard unsecured loan is 10.32%, while for a comparable green loan it's 7.01%*.

Working out the cost

Here are a few examples, to give you an idea of how much you might have to pay in instalments.^

Example 1

Say someone wants to buy a 5kW solar panel system. According to SolarQuotes this could cost between $4,500 and $8,000. Let's assume that the person has been quoted $6,000 and they intend on financing it with Australian Military Bank's Green Loan. Some of the costs this person would have to pay include:

  • a $150 application fee
  • a $10 monthly service fee
  • interest on repayments, from 3.65% p.a. (4.59% p.a. comparison rate*)

This particular loan offers loan terms between one and seven years. A longer loan term will mean smaller regular repayments, but more interest paid overall. On the other side of things, a shorter loan term will come with larger regular repayments, but less interest paid overall. 

With a three-year loan term and the above interest rate, monthly repayments would be around $176, plus the $10 service fee, using the same scenario. The total interest paid over the three years would be around $344. 

So altogether, this borrower would wind up paying around $6,850 in total. That's taking into account the initial loan amount, interest, $360 for three years worth of monthly service fees and the $150 application fee. 

Example 2

In another scenario, let's say someone wants to buy a bigger, 8kW solar panel system. According to SolarQuotes, prices for systems this size range from around $7,500 to $11,000. So in our fictional scenario, let's say the person has been quoted $9,000 and intends to borrow that amount from Hunter United.

Hunter United offers a Green Saver Personal Loan. This particular loan comes with:

  • a $200 application fee
  • interest rates from 6.99% p.a. (8.36% p.a. comparison rate*)

To keep repayments manageable, this person may opt for a slightly longer five-year loan term. With that loan term and the above interest rate, monthly repayments for $9,000 would be around $178. The total interest paid over the full five years would be approximately $1,690.

So overall, this borrower would wind up paying around $10,890 for their solar panels. That's taking into consideration the initial $9,000 loan, the interest and the $200 application fee. This particular loan doesn't charge a monthly service fee.

Infographic reads: Some costs that come with personal loans

Green loans on offer

If you've come this far, then right about now you probably want to know what green loan options are out there. A few green loans to consider are:

Feeling motivated to go green? Use our personal loan repayment calculator, to work out how much your monthly repayments might be. Or if none of the loans above appeal to you, head to Mozo's compare personal loans page for more options. You'll be generating your own energy in no time!

Compare personal loans

Mozo may receive payment if you click products on our site. We don’t compare the entire market, but you can search our database of 236 personal loans.
Last updated 15 December 2024 Important disclosures and comparison rate warning*
  • Low Rate Personal Loan

    Excellent Credit, $5,000 - $75,000

    interest rate
    comparison rate
    Monthly repayment
    6.57% p.a.to 8.39% p.a.
    7.19% p.a.to 8.75% p.a.based on $30,000
    over 5 years

    Competitive low rates for borrowers with excellent credit on 1-7 year loans from $5,000 up to $75,000, plus free extra repayments. Winner of Mozo's Experts Choice Excellent Credit Unsecured Personal Loan 2024 and Excellent Credit Secured Personal Loan 2024 awards ^. Min. income of 25k after tax, to apply.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.57% would cost $35,528.12 including fees.

    Compare
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    Details
  • Unsecured Personal Loan

    interest rate
    comparison rate
    Monthly repayment
    6.56% p.a.to 21.99% p.a.
    6.56% p.a.to 22.79% p.a.based on $30,000
    over 5 years

    Competitive fixed rates for borrowers on 1-7 year loans from $5,000 up to $50,000. $0 monthly fees and no early repayment fees to pay. Fast application process on the Revolut app. According to Revolut and subject to loan approval, you'll receive your money into your Revolut account straight away.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.56% would cost $35,768.68 including fees.

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    Details
  • Unsecured Personal Loan

    Fixed

    interest rate
    comparison rate
    Monthly repayment
    6.75% p.a.to 26.95% p.a.
    6.75% p.a.to 26.95% p.a.based on $30,000
    over 5 years

    Borrow up to $50,000 unsecured. Perfect if you earn more than $22,100 p.a. and have good to excellent credit. Multi-year winner of Mozo’s Experts Choice Unsecured Personal Loan Award, 2021, 2022, 2023 & 2024^'

    Repayment terms from 2 years to 7 years. Representative example: a 5 year $30,000 loan at 6.75% would cost $35,430.23 including fees.

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    Details
  • Debt Consolidation Loan

    $5,000-$75,000

    interest rate
    comparison rate
    Monthly repayment
    6.57% p.a.to 18.99% p.a.
    7.19% p.a.to 19.39% p.a.based on $30,000
    over 5 years

    Competitive fixed rates on loans up to $75,000 depending on your credit score. Zero monthly account keeping fees, no exit fees and no early repayment fees. Make weekly, fortnightly or monthly repayments, over 1 to 7 years managed entirely online, at any time. Fast and easy, 100% online application.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.57% would cost $35,528.12 including fees.

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    Details
  • Home Improvement Loan

    Excellent Credit, $5,000 - $100,000

    interest rate
    comparison rate
    Monthly repayment
    6.57% p.a.to 8.39% p.a.
    7.19% p.a.to 8.75% p.a.based on $30,000
    over 5 years

    Give your home a refresh with the 2025 Mozo award-winning provider OMM. Borrow up to $100,000 for loan terms 1-7 years. Flexible weekly, fortnightly or monthly repayment options. No monthly, early repayment or exit fees. Fast 100% online application.

    Repayment terms from 1 year to 7 years. Representative example: a 5 year $30,000 loan at 6.57% would cost $35,278.12 including fees.

    Compare
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    Details

*Name has been changed for privacy.

**Average interest rates reflect the lowest interest rates offered for loans, available for customers with a good credit rating. Based on information available in the Mozo database and correct as of 17 February 2021.

^Examples calculated using Mozo’s personal loan repayment calculator.

* WARNING: The Comparison Rate combines the lender's interest rate, fees and charges into a single rate to show the true cost of a personal loan. The comparison rates displayed are calculated based on a loan of $30,000 for a term of 5 years or a loan of $10,000 for a term of 3 years as indicated, based on monthly principal and interest repayments, on a secured basis for secured loans and an unsecured basis for unsecured loans. This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

^See information about the Mozo Experts Choice Personal Loan Awards

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