Looking to install a home solar power system in Melbourne, or a solar hot water system, on your home? Is the price point too great, even with government rebates, incentives and grant options? Green loans might be available to you to help you begin your solar journey – or even help you purchase an electric vehicle or other renewable products!
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What are green loans in Australia?
Depending on where you live, green loans may be available for you and your household.
What are green loans? Which banks offer this, and why do they differ from other loans in our marketplace?
We all know that we all have options for reducing our carbon emissions. But this green move can come at a high cost.
Most green loans are intended to be used by individuals in Australia. Green lending offers a very attractive rate because you are limited to purchases. What does green credit do? They are an excellent alternative to personal loans or mortgage loans.
A green loan is a form of credit that a financial institution offers to a customer on the condition that they utilise the funds for a purpose that the lender deems to be environmentally beneficial. Examples:
- You can use unsecured personal loans to purchase certain eco-friendly products for your home.
- Car loans are used to buy a more environmentally friendly vehicle, such as an electric or hybrid.
- Green home loans are also being introduced to the marketplace.
Green loans for solar: Affordable financing for clean energy
Green loans for solar help Australian homeowners and businesses access low-interest financing for solar panel installations, battery storage, and energy-efficient upgrades. A green loan Australia offers flexible terms, making it easier to invest in renewable energy without high upfront costs. Many financial institutions provide green loans, ensuring affordability while reducing carbon footprints.
Benefits of green loans
- Low-interest rates: Competitive rates compared to traditional loans.
- Flexible repayment terms: Choose repayment periods that suit your budget.
- Government support: Many green loan programs align with incentives like the NSW solar rebate for additional savings.
Energy Matters has a nationwide network of trusted local installers ready to provide you with up to 3 Free Solar Quotes. Complete our quick quiz and begin your solar journey today!
What can a green loan be used for?
Although the products you can buy with a green loan may differ between lenders, you can generally use one to purchase items that consume less energy or water, lessen your reliance on the grid, or lessen pollution. If the purchase you have in mind is eligible for a green loan, it is a good idea to speak with your lender directly. For instance, the item could have to achieve a specific star rating for energy efficiency.
You might be able to buy the following with a green loan:
- House solar panels, hot water systems, pool heaters or battery systems
- “Green”, eco-friendly or electric vehicle
- Double glazing for windows or external awnings
- Water tanks
- Insulation
- Grey water treatment system
- Energy-efficient appliances and white goods
- Energy-efficient electric heaters or split systems, evaporative coolers or energy-efficient air conditioners
- Home ventilation systems
Who is eligible for a green loan?
Beyond the purpose of a loan, green financing requirements are generally the same as other loans. When loan applications are processed, the lender will examine factors like your income, credit score and income, and if you are a resident of Australia. You should provide your name, telephone number, a copy of your earnings and employment information, and the financial details of your loan.
What is the difference between green loans and a personal loan?
Green loans are designed specifically for renewable energy or sustainable products. On the other hand, a personal loan can be specified based on the loan agreement.
With green loans in Australia, you will likely need to retain evidence of your purchase, such as the solar panels on your roof. Also, solar loans often have lower interest rates to make sustainable energy even more attractive and affordable.
What features to look for in green loans in Australia?
There are many green loans for solar available today. To ensure you get the right green loan in Australia, here are the main features to look for:
- Fees: All green loans come with fees, such as late payment, early payment, redraw fees, and more. Make sure you are familiar with all of these when shopping for a green loan.
- Loan term: When it comes to green loans, you only have to pay less interest when you pay for the loan on a shorter term.
- Comparison rate: This will factor in the interest rate and fees you will be charged with a green loan. This will help you understand the true cost of the loan.
- Extras: Green loans come with extras, such as free extra repayments or flexible repayment schedule.
Adding a solar panel system to your home green loan
Other lower-interest options include adding the cost of solar panels to mortgage loans for homeowners. Your mortgage can sometimes provide the lowest price. Your electricity bills will probably be significantly more than simply loan repayment.
Green loan interest rates
The interest rate, also known as the Annual Percentage Rate (APR) or Advertised Rate, is the portion of the loan you will pay back plus interest; it is typically expressed as an annual rate.
The lender, credit history, repayment schedule, and other variables affect interest rates. They are determined by the lender’s assessment of risk (against you specifically and the market at large) and their underlying expenses.
The best green loan is only sometimes the one with the lowest interest rate. To accurately evaluate the worth of any interest rate on offer, you must consider the overall cost of the loan, including interest, fees, and other expenditures. Therefore, even though may represent certain green loans as having 0% interest, you must check further to determine the loan’s actual cost.
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Other low interest alternatives – green loans from banks
Many financial institutions now offer green loans to customers at lower interest rates! Here’s a selection of products not tied to the Government Green Loans program. All are offering low-interest loans for the purchase of solar energy systems in Melbourne or to other regions.
Get in touch with the finance provider for details such as the maximum amount you can borrow and determine what might qualify for interest rate based on the unique situation. Here are some financial institutions.
Australian Military Bank
An Australian Military Bank Green Loan is an unsecured personal loan designed to help finance the purchase of environmentally friendly products. It can be used for various energy-efficient upgrades, including:
- Renewable energy solutions – Solar panels, battery storage, and energy-efficient hot water systems.
- Home efficiency improvements – Insulation, water capture and recycling systems, and 5-star rated or higher household appliances.
- Sustainable heating & cooling – Energy-efficient air conditioning, heating, and ventilation systems.
Australian Mutual Bank Ltd
The Australian Mutual Bank Ltd Green Loan supports adopting various eco-friendly home products, including:
- Solar photovoltaic panels and storage
- Energy-efficient lighting and appliances
- Water conservation systems like tanks and greywater recycling, and insulation and double glazing to enhance home energy efficiency.
The Australian Mutual Bank Ltd Green Car Loan also offers discounted rates for qualifying vehicles, specifically manufacturer-designated hybrid or electric cars with CO2 emissions of 150g/km or less in the combined driving cycle, promoting the transition to greener transportation.
Bank Australia Limited
Bank Australia Limited offers Clean Energy Home Loans and Green Car Loans to support sustainable choices.
- Clean Energy Home Loan: This loan offers a reduced interest rate for energy-efficient homes, whether newly built or renovated. Eligibility and required documentation vary depending on the home’s type.
- Green Car Loan: Designed for fully electric vehicles (EVs) without internal combustion engines (excluding hybrids). Loans are available for new EVs (up to 7-year terms) and used EVs up to 7 years old (maximum 5-year terms). Options include cars and motorbikes, whether for purchase or refinancing.
Bendigo Bank
Bendigo Bank Green Personal Loans support eco-friendly purchases, helping you invest in energy-efficient solutions.
- Secured Green Personal Loan – Offers benefits for purchasing fuel-efficient vehicles, rewarding your commitment to sustainability.
- Unsecured Green Personal Loan – Ideal for financing alternative energy solutions like solar power systems, grey water treatment, or EV charging stations.
Brighte
Brighte Green Loan offers energy efficient products such as:
- Solar panels
- Solar batteries, solar hot water, and heating and cooling.
Commonwealth Bank of Australia
Customers with an eligible CommBank home loan or investment home loan can use the CommBank Green Loan to buy and install eligible clean energy products at the property secured by their eligible CommBank home loan or investment home loan, such as:
- Solar panels
- Battery packs
- Solar/heat pump hot water systems
- Electric vehicle charging stations
Community First Credit Union
Community First Credit Union Green loans are specialised financial products designed to support homeowners in funding eco-friendly home improvements. To qualify, applicants must own the property and intend to finance environmentally sustainable upgrades such as solar panel installations or rainwater tank systems.
Furthermore, to ensure quality and compliance, these projects must be executed by certified tradespeople, and the loan application necessitates the submission of detailed quotes or invoices as proof of planned expenditures.
Gateway Bank Ltd
- Green Plus Home Loan for energy efficient homes with a certified 7 Star rating from NatHERS or Residential Efficiency Scorecard.
- Green Home Loan package for homes with a Residential Efficiency Scorecard rating between a minimum of 4 Stars to a maximum of 6 stars and those that have not been certified but contain a wide range of environmental and energy-efficient elements.
HSBC Bank Australia Limited
HSBC Bank green loan can help your company fully or partially finance/re-finance new or existing eligible green projects, including but are not limited to, creating renewable energy systems, constructing or renovating green buildings, purchasing greener equipment or energy-efficient assets and clean transport.
HandyPay
Handy Finance Green Loans provide a smart and sustainable way to invest in solar energy. These loans cover the cost of purchasing and installing solar panels and batteries, helping you lower electricity bills while reducing your environmental impact. With a green loan, you can:
- Install solar panels to generate clean energy from the sun.
- Purchase and set up solar batteries to store excess energy for later use.
loans.com.au
Offers to help with a new home, construction or car loans for green loans.
- Green Home Loan: This specialised Green Home Loan incentivises environmentally sustainable housing by financing newly constructed homes that meet stringent energy efficiency standards. To qualify, applicants must provide a National House Energy Rating Scheme (NatHERS) certificate, issued by an accredited assessor, demonstrating a minimum 7.0-star rating.
- Green Car Loan: Green car discount on qualifying hybrid or electric cars. Popular electric models include:
- Tesla: Model Y, Model 3
- BYD: Atto 3, Seal, Dolphin
- MG: MG4
- Green Constructions Loan: Get a 7 star or higher Nationwide House Energy Rating Scheme (NatHERS) rating for a discount on the variable rate construction loan; NatHERS is a star rating system (out of 10) that rates the energy efficiency of a home based on its design
Queensland Country Bank Limited
Green Car Loans and Business Green Car Loans allow you to borrow up to 10% of the initial loan value to fund charging technology to support your green choice. This could include solar, battery storage or electric charging equipment.
Regional Australia Bank Ltd
Enviro Loan: Get rewarded for making green purchases and improvements to households with a low-interest rate, great features and no monthly service fees or charges.
South West Slopes Credit Union Ltd
SWSCU’s greener future loan is for energy efficient or environmentally friendly products such as solar power products, external awnings or shutters, grey water systems, double glazing to existing property and energy efficient whitegoods (whitegoods with 70% of star rating).
