Buying a solar power system for your home or business isn’t like buying a carton of milk, so it’s beneficial to take advantage of the solar finance options.
Financial products with structured payment plans are beneficial for a lot of people investing in Solar systems, however, as we all know, many money lenders are not the most transparent organisations.
There are many finance options for solar power, that in my opinion, are very misleading in how they are presented. This breeds more confusion with end customers and makes it harder for them to be confident in taking the leap to install a solar power system on their home or business.
The 0% interest finance option
When I see businesses offering 0% interest options the first thing that comes into my mind is “what a load of rubbish”. If Commonwealth Bank started advertising 0% interest home loans would we believe them? Of course not!
There are two lenders in the solar industry that I see quite a lot of offering this type of option, they are Brighte and Certegy. If their loans were interest-free, does that mean they are a not for profit money lender? We all know the answer to this!
0% interest loans are advertised regularly in other industries. We all know we can walk into most major appliance stores and purchase a new tv and bed without a deposit, and we wouldn’t pay any interest for 60 months in some cases.
But when you pay no interest, you pay big fees! This is of course how these lenders make a profit, fees payable by the purchaser, and fees payable by the retailer, which may as well be fees payable by the purchaser again.
This arrangement is essentially how the 0% interest loans work in the solar industry.
Brighte Solar Finance
As a solar retailer, when we sign up to become part of the Brighte network, we are asked to sign a document that states that the fees applied by the lender will not be passed onto the purchaser.
When this document is signed by the retailer, it means that the lender is able to advertise 0% interest financial products without being regulated by the National Consumer Credit Protection Act, which means that
- If you have a complaint about your agreement, you may not have access to the services of an external dispute resolution scheme that has been approved by ASIC. This means that you may have to go to court to resolve a dispute with the provider.
- If you have trouble making the periodic payments, you may not have the right to ask the provider for a hardship variation to help you get through your financial difficulty.
- If you have trouble making payments, your provider may take action against you for non-payment without giving you a chance to remedy the fault.
This is why we DO NOT use these lenders.
When using Brighte’s 0% interest option, the fee for a loan that exceeds 36 months is 25%, which is supposed to be absorbed by the retailer, which of course doesn’t happen because the retailer would go out of business unless they on-charged the costs.
So it is always the purchaser that bears the cost of the fees. It’s just a shell game hiding where those fees appear.
When speaking with a Brighte consultant about how their product works, he even confirmed to me that this is how it works in the real world (I’m sure it was a slip of the tongue on his behalf).
- 0% interest price = $10000
- Cash price = $8000
Community First Green Loans
We have chosen to offer Community First Green Loans as a finance option to our solar power systems because they are extremely transparent and their loan structures and fees are in our opinion very fair. A few key points about the Community First Green Loans at the time of publication are.
- Interest rate 6.12
- No monthly account keeping fees
- Making extra repayments without penalty and redraw your money as you need it.
- Pay your loan out early without penalty
- Borrow from $1,000 to $35,000, with loan terms from 1 to 10 years
- Unsecured loan
- $199 – One-off application fee
- $25 – late payment fee
- $15 redraw on extra repayments
When speaking to Community First about their “Green Loan”, it was stated to us that the reason they offer such a competitive loan is that they want to build a customer base that may choose to use their other financial products once they have repaid their Green Loan.
The only slightly negative feedback we have had when sending our customers to Community First is that because they’re so busy with Green Loan applications, the wait time for approval can be up to 4 weeks, but when you are able to save over $1200 on your loan by using their products, I see it as worth the wait.
- 3 year Green Loan cost = $8748
- Cash price = $8000
As a solar business that wants to help the local community by offering real, unbiased and transparent advice, I want to be able to give options to financial products that I believe are equally transparent.
Of course, I am not handing out financial advice here and we receive no kick-backs from Community First either! But after speaking with many lenders offering loans for solar power systems, Community First currently stands far taller than the rest.