Interest-free solar finance with Humm

Published: 16 September 2021

Purchasing solar can seem like a big investment, but with $0 deposit, interest-free financing you can be cash flow positive from day one!

Humm is a Buy Now Pay Later (BNPL) service that can be used for many types of purchases, including solar power systems from Instyle Solar. You can cover the cost of the system with equal fortnightly payments, spread over a period of up to 60 months. This means you can start generating your own electricity at zero upfront cost, and then pay with the savings achieved.

Depending on the size of your purchase, Humm offers two financing options: “Little Things” with a price of up to $2,000, and “Big Things” with a price of up to $30,000. Little Things can be split into 5 or 10 payments, weekly or fortnightly, while Big Things can be split into fortnightly payments over 6-60 months. Humm offers instant approval if you meet their eligibility conditions.

Both financing options from Humm are interest-free, and instead you pay fixed monthly fees. 

  • $8 per month, until the balance is fully paid off. However, this fee is not charged for Little Things that are paid in less than five months.
  • $6 for each late payment.
  • Big Things have a $35-$90 establishment fee on your first purchase, and $22 for subsequent purchases. Little Things have zero establishment fees.

Below we will provide a cash flow for a 6.6-kW solar power system with a price of $5,299, using the Big Things financing option from Humm. For this example, we will assume the system is installed in Brisbane, QLD.

Financing a 6.6-kW solar system with Humm

Assuming favourable sunlight conditions, a 6.6-kW solar system in Brisbane can be expected to produce between 9,000 and 10,000 kilowatt-hours per year. To estimate the annual savings, we will assume the following conditions:

  • A solar PV system output of 9,500 kWh per year
  • The home with this system consumes 40% of the electricity, and 60% is sent to the grid.
  • The electricity price is 22 cents/kWh, and the feed-in tariff is 12 cents/kWh.

In this case, you would be saving $1,520 in the first year. You can split the upfront cost over five years with Humm, which results in 130 fortnightly payments of $40.76 each. When adding all Humm fees, you pay $1,177.80 during the first year (assuming the $22 establishment fee). 

In other words, the 6.6-kW solar PV system can pay for itself, and you will still have over $340 left in net savings. After five years, the Humm loan will be completely paid off.

The following table and chart show the estimated payments and savings over 10 years. Electricity savings will tend to increase slightly each year due to inflation, while your Humm payments remain constant. After 10 years, the 6.6-kW solar PV system will be approaching $10,000 in accumulated savings:

YearHumm PaymentsSolar SavingsNet SavingsAccumulated Savings
1-$1,177.80$1,520.00$342.20$342.20
2-$1,155.80$1,529.04$373.24$715.44
3-$1,155.80$1,538.24$382.44$1,097.87
4-$1,155.80$1,547.60$391.80$1,489.68
5-$1,155.80$1,557.14$401.34$1,891.01
6$1,566.84$1,566.84$3,457.85
7$1,576.71$1,576.71$5,034.55
8$1,586.75$1,586.75$6,621.30
9$1,596.97$1,596.97$8,218.27
10$1,607.36$1,607.36$9,825.63

The following chart displays the cash flow over a 10-year period. Keep in mind that solar panels have a typical service life of 25 years or more, which means your accumulated savings will be much higher over time.

Who can use Humm for solar financing?

Humm has four general requirements to be eligible for financing: 

  • An Australian citizen or permanent resident
  • At least 18 years old
  • Have a valid debit card in your name 
  • Not have any bankruptcies or insolvencies on your record.

Want to learn more? Contact us today!

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