Green Loans, Low Interest And Interest-Free Solar Power Systems

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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!

What are green loans?

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.

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

Image: Plenti

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, it’s likely that you will 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 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.

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!

Energy Matter's quick survey

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.

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. 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.

Get a discounted rate on a qualifying green car.

To be eligible: the vehicle must be a manufacturer-designated petrol-electric hybrid, diesel-electric hybrid, plug-in hybrid, or electric car, with carbon dioxide (CO2) emissions no higher than 150 grams/kilometre (g/km) in the ‘combined’ driving cycle.

Source&Image: Australian Mutual Bank Ltd

LEV Car Loans offer to current Bank Australia Limited clients who purchase low-emission vehicles (e.g. Tesla, Nissan Leaf, Hyundai Ioniq).

The unsecured Green Personal Loan is available for environmentally friendly purchases such as solar panel systems, solar hot water, grey water treatment systems or top energy saving white goods.

Brighte Green Loan offers energy efficient products such as solar panels, solar batteries, solar hot water, and heating and cooling.

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 such as solar panels, battery packs and solar hot water systems at the property secured by their eligible CommBank home loan or investment home loan.

A Community First Green Loan can use to finance the purchase of 5-star rated environmentally friendly products. Green Loan includes solar hot water and solar panel systems.

  • 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 green loan can help your company fund various projects, including creating renewable energy systems, constructing or renovating green buildings, purchasing greener equipment or energy-efficient assets and developing sustainable or recycled products.

A green loan allows you to get a pre-approved limit for any verifiable green initiative. It includes solar panels, battery storage, inverters, solar heating and cooling, rainwater tanks, and energy efficient renovations.

When selecting a bank or other financial institution for a green solar power loan, read all the terms and conditions carefully before signing any contracts.

  • Green eco loan: Green Eco Loan is a low-rate personal loan to reward you for making the greener choice. It includes an offset account, a low-interest rate and penalty-free repayments.
  • Green car loan package: It’s a low-rate personal loan to reward you for purchasing a lower-emissions vehicle.

LCU has developed its Green Loan for environmentally conscious members to reduce their carbon footprint.

Offers to help with a new home, construction or car loans for green loans.

  • Green Home Loan: Get rewarded with a discount on the home loan rate when going green for a new home.
  • Green Car Loan: Discount on qualifying hybrid or electric cars.
  • 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 can borrow up to 10% of the initial loan value to fund charging technology to support your green choice. It could include solar, battery storage or electric charging equipment.

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.

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)