i am your guide to solar finance

Upfront purchase

You pay the full costs of the solar system upfront. 

Also known as outright purchase or cash purchase

Finance details

Period Interest Rate Early repayment possible

Ownership of the solar system

  • You own the solar system 

Financing costs, fees and charges

  • Nil 

Performance and maintenance costs

  • You are responsible for monitoring system performance and the costs of any out-of-warranty maintenance required, including inverter replacement. 


  • The lowest total cost over the life of the system.
  • Immediate bill savings benefits.



  • The highest upfront cost. 
  • Initial cost of the system may not be outweighed by longer term bill savings 

Managing risks

  • You are responsible for making sure the system produces as much as you expect and that you use the energy it produces.


Below is one illustration of how the costs and bill savings could work for upfront purchase. 

In practice these costs and bill savings will vary depending on what you pay for the system, how much energy it produces and how much you use.


Solar project

Solar system size (kW)


Upfront system cost ($ net STC subsidy)


Proportion of power used (%)


Life of system

25 years

Maintenance costs

(Assume a new inverter is required every 10 years)



Cost of daytime grid electricity

$0.20 to $0.51 / kWh

Payment conditions

Deposit/initial payment


Term of finance


Comparison interest rate


Costs and bill savings

Total payments


Total bill savings


Net savings



Effective interest rate


Lifetime unit cost of energy

0.14 $/ kWh

The chart below illustrates the annual cash flow of energy bill savings and the costs of the solar PV system and finance based on this scenario.

Cash purchase of 3kW system for household at home during work days

The chart shows that all the costs of the system are paid in the first year. The system delivers net savings of nearly $1,000 per year, in every year apart from year 10 and 20, when the scenario assumes that the inverter requires replacing.

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Page last updated: 18 December 2015