“Interest-Free” Solar And Battery Bundles – What You Should Know

Zero interest finance solar power and battery storage deals can be tempting – but crunch the numbers and shop around to see if you can get a better deal.

On the topic of “no interest” finance and solar generally, SolarQuotes founder Finn states in his solar buyers guide:

“If you see a deal that claims ‘no interest’, your BS detector should be going off. All finance has a cost. The “no interest” solar deals often charge the installer a fee of around 15-25% on top of the ‘cash’ price. That extra cost is ultimately paid by you.”

The installer involved may also be prepared to take a big hit; just breaking even for whatever reason – such as getting folks on board for other services the company will profit from. Or corners may be cut on installation quality and in other aspects such as customer service. Regardless of the motivation or implementation, the customer may be worse off.

(Added: Read more about the tricks and traps of “0% interest” solar here.)

Something interesting happened this week when a large solar company switched its “interest-free” finance provider at the beginning of the month. On January 31, I took note of its no-interest solar and battery bundle deals, then checked them again on February 1 after the changeover.

The package on offer (which didn’t change):

• Tesla Powerwall solar battery
• 6.63kW JA Solar panel based PV system
• Fronius inverter – Primo 5kW

So, a good battery, good “budget” panels and a great inverter.

Below is what happened with pricing in each state where the “no interest” deal was available prior and after. These prices also required signing up for the company’s VPP (Virtual Power Plant) for 5 years¹, which provided a $1,000 – $1,500 discount depending on the state (a requirement that also applied in January), and are after all other subsidies.

New South Wales

Cost on January 31
$299 /month for 60 months
Total/buy outright: $17,917

Cost on February 1
$348 /month for 60 months
Total/buy outright: $20,837 outright.

Victoria

Cost on January 31
$260 /month for 60 months
Total/buy outright: $15,600

Cost on February 1
$310 /month for 60 months
Total/buy outright: $18,576 outright.

Queensland

Cost on January 31
$299 /month for 60 months
Total/buy outright: $17,892

Cost on February 1
$347 /month for 60 months
Total/buy outright: $20,804 outright.

South Australia

Cost on January 31
$258 /month for 60 months
Total/buy outright $15,442

Cost on February 1
$306 /month for 60 months
Total/buy outright: $18,354

So, an increase of close to $3,000 in each state in less than 24 hours. That’s around a 16.5% price hike overnight. The why isn’t clear, but the timing was interesting.

Need Finance?

Many installers, including good quality companies, offer no-interest deals simply because they are in demand. After all, solar + a battery is a substantial outlay and many households simply don’t have that type of cash laying around.

Companies entering into these sorts of arrangements with the various “no interest” finance providers cannot advertise a lower cash price – but a lower price might be offered during negotiations with those who want to buy outright.

Finn’s advice (from the Solar 101 guide):

“.. you can get a much better deal overall by shopping around for a low-interest finance provider and avoiding the easy-sign-up, ‘no interest’ deals.”

Quite a few banks already offer low-interest green loans, so it’s worth tapping your bank on the shoulder to see what’s available. You may also be able to add a system to your mortgage. Learn more about solar finance options here.

But …

Calculate The Payback

If you’re wanting a battery installed with a solar power system purely for economic reasons, the other important aspect to consider is how long it will take to achieve simple payback.

Finn’s comment related specifically to solar-only, which provides a really good return – making using low-interest finance for solar a viable option. But adding a battery bumps up the system cost significantly and greatly extends the payback. See for yourself using SolarQuotes solar and battery calculator and fiddle with the settings to match your situation. Remember to factor in the cost of interest if applicable and when looking at the results take note of not just the “blended” but also the separate solar and battery payback figures.

On a related note, if you’d like to learn more about residential energy storage and whether it might be right for you, check out Finn’s 101 guides to understanding, buying and owning home batteries.