Solar Shop sets up private green loans scheme with new finance arm

Renewable energy veteran The Solar Shop has created its own financing arm designed to provide customers with loans to install enough solar panels to eliminate electricity bills, effectively creating the company’s own green loans scheme.

It comes as the Federal Government has issued a complete overhaul of its green initiatives scheme, which includes rebates for solar hot water systems.

Kevin Whelan, general manager of Solar Financial Solutions, says the new loan scheme has provided Solar Shop with the ability to help customers install solar panels with or without government assistance.

“The loans do work well with the rebate and work alongside them. Basically the rebate acts as a deposit for the loan, and they fund the balance of the loan which typically could be about $14,000.”

“The Solar Shop has been around for about 12 years and has been doing things for a long time, and they know how to sustain a sales model outside of rebates and rebate changes. We’ve built it all around that fact.”

The scheme works by funding the purchase of a large number of solar panels, designed to eliminate a user’s electricity bill. Once the loan is paid back, which Whelan says will take about 10 years at the most, customers could actually earn money by putting electricity back into the grid.

He says the financing system was designed due to a number of key issues associated with customers’ purchasing habits.

“Basically we found that customers looked and saw value in buying solar panels, but couldn’t afford upfront capital to afford the type of system we’re talking about. So Solar Shop talked to the banks about this idea, but the response they had was “we don’t understand”, and they suggested customers take out a personal loan or add it to the mortgage.”

“So they decided to it themselves. In essence what we are trying to do is make the whole scheme cashflow neutral, we eliminate your bill and you pay what you used to pay the energy company.”

Whelan maintains the new funding arm will set up Solar Shop for several years, as the demand for renewable energy increases. He says the industry will hit over $1.2 billion dollars next year, with Solar Shop to take one quarter of the market.

“The solar industry is a relatively new market in Australia, and part of what we are doing is trying to educate the market in regards to solar purchases and taking them through the best solution.”

“That’s actually been one of the challenges with this new offer, because most of the Australian financial institutions don’t understand the market. For a customer to walk into the big four and describe to them this solar offer is daunting because many don’t understand it. But that’s why we’re doing this, we control about 25% of this market and we’re confident it will succeed.”