Zero Upfront Cost for Solar - Is It Too Good To Be True?
Solar is becoming increasingly popular in New Zealand, but with this comes various promotional tactics. Among them, “zero upfront cost” offers might catch your eye. But is it really as good as it sounds?
Just like the common $10,000 solar system promotions we’ve talked about in the past, there are a few things we recommend you consider.
The Reality Behind “Free” Solar Panels
You might have seen companies advertising free solar systems. However, these enticing offers come with long-term commitments—usually 20-25 years. Companies install solar panels on your home at no upfront cost, but you pay a monthly rental fee.
As you can imagine, after 20 years of paying a monthly bill, you will have paid far more than the system is worth if purchased outright, and you still won’t own it. We’ve seen examples where people end up outlaying 3x the upfront cost.
You’ll also be tied to one electricity retailer for the contract’s length, preventing you from shopping around for the best deal.
Solar rental companies often highlight the benefit of covering maintenance costs. However, as solar PV systems have no moving parts, maintenance isn’t much of an issue.
Selling Your Home with Solar as a Service
Selling your home with a leased solar system can be tricky. Since most Kiwis don’t stay in one home for 25 years, this issue is likely to come up. You generally have three options:
- Get the new owners to take over the contract. A solar system should be an asset that increases your home’s value. But with a long-term contract and no ownership, it’ll be viewed as a liability.
- Pay out the remaining contract so the new owners don’t have to worry about the monthly fee.
- Pay to have the system removed and taken to your new home.
An Alternative: Green Loans
Another way to get solar with ‘$0 upfront’ is a green loan from your bank.
No or low-interest loans are available to most homeowners via their bank. These loans help you make energy-efficient upgrades to your home, including heat pumps, double glazing, insulation, and solar.
Green loans are one of the best ways to finance your solar system. Just remember, these loans come from your bank, not the solar company (even if it doesn’t always appear this way). You can use them with any SEANZ-registered installer.
What Should You Do?
When considering zero upfront cost offers, do your research.
Read reviews and understand the fine print. Contracts can be long and confusing, but it’s vital to know what you’re getting into.
So, zero upfront cost solar; is it too good to be true? In some cases, maybe not. The key, is to be aware of all the details, ensuring you’re making an informed decision that’s right for you.
Remember, ownership almost always trumps renting in the long run.
Keen to explore owning your own solar system? Contact us to book a site visit today.