Tasmania has announced it will be offering a new renewable energy scheme for small business and homeowners. Rather than additional rebates, or increased tariffs, the government announced that it will offer no interest loans for anyone who is interested in purchasing solar power.
The loans will be offered at $4000 for homeowners and $10,000 for small business. While this amount won’t cover the entire cost of larger systems, any additional finance will be offered by private low-interest lenders.
Regardless of the system, one chooses to purchase, this is good news for all prospective solar owners in Tasmania.
The policy comes after the government announced it wanted to support a previous scheme which allowed low-income homeowners struggling with electricity bills, to borrow money interest-free.
While the details surrounding the bill are vague, given it is a recent announcement, it has been confirmed that the government has set aside $10 million to fund the project. The government also stated that that tariffs would most likely stay stagnate in the near future.
Tasmanian Minister Mr. Groom had this to say:
"I don't want to give people the impression the Government is on the verge of increasing the feed-in tariff.”
Currently, the feed-in tariff (the price solar owners can sell electricity back to the grid for) sits around 6.67c/kWh, which is an increase of around 22% since 2015.
A recent study conducted by the Tasmanian Renewable Energy Alliance stated that the electricity was actually worth 22c, however, the hope is that changes to financing will have an enormous effect on the uptake of renewable technology within Tasmania.
Financing is one of the most common ways to purchase solar power, due to a solar system’s unique ability to cover its own cost, either entirely or partially. Meaning families can plan for the future with little to no additional expense.
However, financing a system means paying more overall due to interest, leaving a lot of people either undecided or simply turned off by the idea. Tasmania has therefore removed a very imposing obstacle for thousands of families across the state.
Could we see something similar in Queensland? Currently, financing options come at a price. Usually, an installer will work side-by-side with a financier to enable a seamless purchasing experience. While interest rates are comparatively low, it doesn’t seem like there is much talk about offering interest-free loans as of yet.
However, that doesn’t mean that it won’t happen. Given that solar rebates are being reduced year on year as of 2017, it would not be a surprise to see state or federal level policies being implemented .
Interest-free loans are a great way of reducing the cost of solar, and yet will save more for the Liberal government in the long run. We all know how much they like that.