Four ways to own your home solar panels

When looking at putting solar panels on your home there are so many decisions to consider. Where to begin the search, which solar system is right for your property, which installer/supplier is best, which retailer has the best plan, timing, and budget, to name a few.

When it comes to budget, did you also know there are different ways to buy or own the systems that can greatly influence affordability and timing? Some options don’t require you to pay anything upfront and even combine both your grid and solar electricity in a single energy plan. There is now something for nearly everyone. Here are some of the different options available and their pros and cons.

1) Buy home solar panels outright

Buying your home solar system outright is one of the most common ways to buy solar. Under this option, you pay for your solar system upfront from your solar retailer or installer – and we strongly recommend using a CEC Approved Solar Retailer. Sometimes you may have to pay an initial deposit and then the balance once your system is installed. Once installed, you own your system, which means you own all the electricity produced (or generated) by it.

It can be difficult to achieve a perfect balance between the total amount of solar your system generates with your household usage. For example, your solar alone can’t help you watch TV at night. You will therefore need to top up your energy supply from the grid. Other times, you may have excess solar, which you can export to the grid. When you export extra solar to the grid, you may be eligible to receive a feed-in-tariff from your electricity retailer; this means your electricity retailer may pay you for your extra solar.

When you own your system outright, you’re responsible for cleaning and maintaining it and making sure it’s performing the way it should. Any solar system sold by a CEC Approved Solar Retailer will include minimum system performance and installation warranties, but it’s up to you to contact your solar retailer regarding any performance questions or issues.

When you buy your system outright, you still require a separate contract with an electricity retailer to supply your grid electricity for when you’re using more electricity than your solar system is producing.

Pros: Own system from day 1, access to a solar FiT from your retailer for exported solar

Cons: Need to pay for system upfront, take time to find the right solar retailer/installer, figure out the right system size and panel type, you are responsible for own system maintenance and monitoring performance.

2) Home solar financing

Using finance to purchase a solar system is very similar to buying the system outright, but with no upfront payment. You get the benefit of installing and owning your solar system, but pay a regular, payment (often monthly) to a finance or loan company over a pre-agreed term until you repay the cost of your solar system. Some solar companies have finance partners so they can offer you access to a solar loan or finance as an alternative to paying for you system upfront. Loan terms generally range from 3 to 7 years.

You get the same benefits from owning the system upfront – like owning 100% of the solar-generated and can access a solar FiT from your retailer for any extra solar exported to the grid. But, you’re still responsible for your own system performance and maintenance.
Something else to consider is the overall cost of your solar system may be higher using finance than buying it outright. But for some, the benefit of no upfront costs could outweigh that higher cost.

As with buying outright, you still require a separate contract with an electricity retailer to supply your grid electricity for when you’re using more electricity than your solar system is producing.

Pros: Ability to access solar without needing money upfront, access to a solar FiT from your retailer for exported solar.

Cons: Potentially higher cost using finance, takes time to find the right solar retailer/installer and the best panels, you are responsible for your own system maintenance and monitoring performance.

3) Home Solar Power Purchase Agreement (PPA)

If you don’t have the upfront payment available or finance isn’t for you, then you can consider a solar PPA option. Under a solar PPA, someone else owns the solar PV system that’s installed on your roof for the agreed contract period – normally between 5 to 10 years. On the plus side, this means they are also responsible for monitoring the solar system’s performance and undertaking any maintenance or repairs during the life of the contract.

Typically, under these agreements, you agree to buy all the electricity produced by your solar system at an agreed rate (cents per kilowatt-hour). This means you own all the electricity generated, so you’re eligible to receive a feed-in-tariff from your retailer for any electricity you don’t use yourself but rather export to the grid.

Ownership of the solar system normally transfers to you at the end of the contract term. These contracts can have an early termination fee, where you have to buyout the outstanding system value if you decide to end the contract early. As with finance, you may find the overall cost of the solar system is higher compared to buying the system outright. But the flip side is you get solar for zero upfront costs.

As with buying upfront and finance, you still require a separate contract with an electricity retailer to supply your grid electricity for when you’re using more electricity than your solar system is producing.

Pros: Access to solar for no upfront cost, solar retailer/installer expert chooses the panels and right system size, manages for system maintenance and monitoring performance, access to a solar FiT from your retailer, own system when the contract ends.

Cons: Long term contract, someone else owns the system, early exit fee, requires a separate contract with the electricity retailer.

4) Bundling an electricity plan and home solar

Forward-thinking electricity retailers have recognised the need to help consumers solve the solar dilemma by offering bundled plans that include competitively priced electricity along with the installation of a high-quality solar system – over a set period (such as 7-10 years).

This allows the householder to access solar under one electricity plan without the hassle of sourcing or managing the system over the contract period.

As an electricity retailer, we’ve developed Nectr Home Solar that bundles the solar system costs with 100% carbon offset grid electricity. Billed monthly over 7 years, this plan allows the customer access to solar with zero upfront costs. And at the end of the 7 years, the ownership of the system transfers to you, as the householder, for free.

This solution has many of the benefits similar to the PPA option. Nectr owns the system and therefore coordinates the system design and installation by a CEC Approved Solar Retailer and then manages its maintenance and performance monitoring for the 7-year contract term. But you get the added bonus of bundling your electricity grid supply too.

We see this new plan as the perfect path to help our customers enter into the solar market. One energy contract and one point of contact to make it all happen. You have to have an electricity retailer – so why not consider one that can offer competitive electricity rates AND your solar system in one go.

As with all options, there are some factors to consider with Nectr Home Solar. Firstly, because you only buy the solar energy you consume, you are not eligible to receive a solar FiT for any solar exported to the grid while Nectr owns the system. (This is offset against the plan’s competitive electricity rates). There’s also an early exit fee. If you decide you don’t like the plan or you move home, you can exit the plan by paying out the system buyout cost, which reflects the residual value (capex) of the solar system.

We think it’s great to be able to offer a different way to bring solar to you. Yes, it’s another option in the mix of decisions, but isn’t it good to see an option that actually reduces the number of decisions you have to make.

Pros: Competitive electricity rates and access to solar for no upfront cost in a single contract, single point of contact for electricity and solar installation by a CEC Approved Solar Retailer, expert chooses the panels system size and manages for system maintenance and monitoring performance, own system when the contract ends.
Cons: Long term contract, early exit fee, someone else owns the system during the contract term.