Interest-free solar finance with Zip Money

Published: 23 September 2021

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.

YearPaymentsSavingsNet SavingsAccum. Savings
0$0.00
1-$1,694.33$1,520.00-$174.33-$174.33
2-$1,197.64$1,529.04$331.40$157.07
3-$929.75$1,538.24$608.48$765.55
4-$918.64$1,547.60$628.96$1,394.51
5-$918.64$1,557.14$638.50$2,033.01
6$1,566.84$1,566.84$3,599.85
7$1,576.71$1,576.71$5,176.55
8$1,586.75$1,586.75$6,763.30
9$1,596.97$1,596.97$8,360.27
10$1,607.36$1,607.36$9,967.63

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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