Guide: Financing Your Solar With Zip Money
Purchasing solar can seem like a big investment, but with $0 deposit, interest-free financing from Zip Money you can be cash flow positive from day one!
Zip Money provides interest-free financing with multiple vendors, including Instyle Solar. Depending on your purchase, Zip Money offers up to $50,000 with a repayment period of up to 60 months. You can use this financing option to install a home solar system, and then pay with the electricity savings achieved.
- ZipMoney only charges $6/month during the repayment period, and $15 for late payments and declined transactions.
- The minimum payment is $40/month or 3% of your current balance (whichever is higher).
If you purchase a solar PV system with Zip Money, and you’re approved for an interest-free period of 60 months, you only pay $360 in total fees. On the other hand, with a $5,000 personal loan at 8% per year, your interest payments over five years will exceed $1,000.
Below we will provide a simple financial projection, showing how a home solar system can cover its own cost when using Zip Money. We will consider a 6.6-kW solar system operating with the typical sunshine conditions of Brisbane, QLD. The system has a price of $5,299 and the interest-free repayment period is 5 years.
Financing a 6.6-kW solar system with Zip Money
With the sunshine available in South East Queensland, a 6.6-kW solar system can be expected to generate 9,000 – 10,000 kilowatt-hours per year. To estimate how this translates into power bill savings, we will assume the following conditions:
- The solar PV system provides 9,500 kWh per year.
- 40% of that energy is consumed directly, saving you 22 cents/kWh.
- The other 60% is exported to the grid, and you get a feed-in tariff of 12 cents/kWh.
With these rates, you get $836 in direct savings and $684 in credit for solar exports, reducing your power bills by $1,520 during the first year. If electricity prices continue increasing, even higher savings can be expected during the following years.
The minimum payment with Zip Money is $40/month or 3% of your balance – whichever is higher. Since 3% of $5,299 is $159, your payments will be higher during the first months, but no interest is charged. Zip Money will only start charging interest if you exceed the approved repayment period – up to 60 months in this example.
The following table compares the annual savings and payments achieved by the 6.6-kW solar power system over 10 years, and total payments during the first 5 years (assuming no late fees or dishonour fees). Note how the loan is fully paid off with power bill savings, and the solar PV system is approaching $10,000 in cumulative savings after 10 years.
|Year||Payments||Savings||Net Savings||Accum. Savings|
The chart below provides the cash flow projection for the 6.6-kW solar system over 10 years, based on these savings and payments:
We considered the first 10 years for simplicity, but high-quality solar panels are normally rated for 25-30 years – the cumulative savings over time will be much higher.
Who can use Zip Money for solar finance?
To qualify for Zip Money, you must meet the following requirements:
- Being an Australian citizen or permanent resident
- Being at least 18 years old.
- Having a primary income of at least $300 per week (some pensions are accepted).
- Having a good credit record.
- Having a valid email address and mobile number.
Want to learn more? Contact us today!
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