Three searches, “STCs and solar finance”, “STCs and green loans” and “STCs and home equity loan solar”, ask the same thing. The honest answer is that STCs are a discount on price, and finance is a way of paying the discounted price over time.
The two layers
Layer one: the price. The installer’s quote less the STC discount equals the amount payable. The STC count depends on system size, your zone and the deeming years. See how much discount you should get.
Layer two: the payment. Cash, a loan, a green loan, a mortgage top-up or an equity line of credit. Lenders typically want the final tax invoice, so they see the post-discount amount.
Green loans
Green loans are personal loans, sometimes with a lower rate for solar, batteries or efficient appliances. Points to check:
- the comparison rate, which includes fees
- whether the loan is secured or unsecured
- early repayment fees
- whether the lender pays the installer directly, and when
Home equity or mortgage top-up
Borrowing against your home can offer a lower rate than a personal loan, but you will be paying it over 20 to 30 years if you do not make extra repayments. A $8,000 solar system financed over 25 years can cost far more in total than the same system paid off in five. If you use equity, consider making extra repayments so you do not pay interest on a roof asset long after its payback.
Retailer finance
Installers often offer a finance product. Compare it with your own options, because the margin may be built into the price or rate.
Practical comparison
| Option | Typical advantage | Check |
|---|---|---|
| Cash or savings | No interest | Opportunity cost |
| Green loan | Possible rate discount | Fees, comparison rate |
| Home equity | Lower rate | Term length, security |
| Retailer finance | Convenient | Total cost, fees |
| Government loan | Zero or low interest | Open or closed, limits |
What this means for you
Settle the STC discount first, then finance the net price. If you will earn savings from the solar, see how they compare with the repayments before borrowing. For zero-interest government loans and pay later products, read STCs and no-interest loans. See also GST on the invoice and the homeowners guide. Installers who arrange finance for customers can learn how the certificate side settles at how it works and pricing.