Solar power could cut four years off mortgage

8th Dec 2011

While many Australian homeowners continue to wait for the banks to drop their interest rates, a reduction in mortgage can also be achieved through the installation of solar power according to one of Australia's peak clean energy bodies.

The Sustainable Energy Association of Australia (SEA) has suggested that installing rooftop solar panels could cut as much as four years off a 25-year $100,000 mortgage.

According to SEA, the investment made in household solar power could be repaid in between four and seven years, assisted by existing federal government rebates – after which point electricity sourced from those panels will be at no cost.

"If this is factored into repayments over the life of a mortgage, it represents a substantial saving on the total cost of the mortgage," the association said in a statement (December 7).

Using calculations based on four factors – a 25 year $100,000 mortgage, a 1.5 kilowatt solar power system at $3,000, the system purchase price added to mortgage and a $600 saving a year in generated electricity costs (at 22 cents per kilowatt hour) – the clean energy body proposes that the $103,000 total could be paid off in 21 years.

"This is a better outcome than a 0.25 per cent interest rate cut on the loan," the SEA asserted.

According to SEA chief executive Professor Ray Wills the proportional savings are smaller on larger loans, but significant saving are still delivered in the long run.

"On a $200,000 mortgage, the contributed savings from 1.5 kilowatt solar panels would shave just over two years of a 25 year loan," he said.

"Of course if electricity prices rise the value of savings increases and your ability to pay off your mortgage would not be compromised by rising energy bills."

Increasing electricity prices can often act as a prompt for many Australians to consider utilising the free power of the sun to provide their energy needs.

Professor Wills urges Australian home owners looking to install a rooftop solar panel system in the new year to make an educated decision.

"Always seek independent financial advice, purchase wisely and as with any significant investment, get a second quote on a system with comparable specifications and choose a reputable supplier," he suggested.

Information used in the SEA's calculations – such as the price of a solar power system and government rebates – differ between states and territories, so homeowners should check what price applies to them.

Posted by Mike Peacock – Solar correspondent

All solar power news categories

Government Rebate & Regulations
Solar Power & Technology


More Solar Power & Technology

Australia to be a part of huge Asian renewable energy growth
SunPower steps up to make solar more affordable
Canberra makes strides toward carbon neutrality
GTM puts solar's massive growth in perspective
Examining Australia's falling solar PV rooftop prices
Australia's shift toward renewable energy picks up the pace
Australia shines at solar decathlon
University of Queensland tapped as lead researcher on massive solar project
100 per cent renewable energy is possible in 10 years, environmental group says
Climate Commission releases report on solar progress
Aussie government actually shows spine for solar power
Be gone, skeptics: One million solar installations and counting
Australia embarks on its greatest solar journey ever
Australia looks to solar thermal for commercial success
Solar power helps King Island reach 100% sustainability
Australians 'heavy supporters of solar power'
Mildura solar plant officially unveiled
Solar power trumps other renewables in Australian minds
Sunshine Coast solar farm "fantastic initiative"
Sunshine Coast cashes in on namesake with solar plans
Energy storage 'could maximise solar power utility'
Solar powered family car - a world first?
Code of conduct for solar installers in the works
'Stop punishing households' for solar PV
Australian solar companies 'adjusting well'
Australian mining 'next solar frontier'
"Rooftop revolution" underway across Australia
Global PV market emerging from sluggish period
Royalla solar farm receives final approval
Leadership challenge a "debacle" for Australian solar power
Solar power giving global renewables a helping hand
Australia's largest CPV solar power plant up and running
Renewable energy misinformation "staggering"
CEC: Don't underestimate consumer desire for solar
Setting energy efficient examples on TV
Solar PV brightening up household bills
World's largest solar powered boat on the move
Climate change is heating up
The global solar power shift
New solar tech win for NSW
Industry orgs praise City of Sydney solar efforts
Clean Energy Council supports Regional Renewables scheme
Asian nations emerging as PV leaders
Solar PV demand continues to grow
Regional areas of Australia to receive more renewables
Australia's significant renewable energy growth
Solar panel reprieve for Queensland
New funding for solar research
Find love with sustainable speed dating
New Victorian solar power deal
 To get your quotes, please enter your postcode: