Are solar panels and a home battery worth it, and how can I finance them?

Are solar panels and a battery worth it?

They can be worth it, depending on your household, your roof and how much power you use during the day. Government modelling estimates a home installing new solar and a battery could save between $700 and $1,600 a year on electricity, with the battery itself accounting for $300 to $900 of that. Those are estimates, not promises, and your result may differ.

The value comes from using your own power instead of buying it. Solar panels make electricity while the sun is up; a battery stores what you do not use so you can draw on it at night. If most of your usage is in the evening, a battery may help more. If you are out all day and home at night, the sums can look quite different.

How the rebates set the sticker price

The rebates decide what you actually pay at the counter. The federal Cheaper Home Batteries Program gives households, businesses and community organisations a discount of around 30% on the upfront cost of an eligible battery between 5 kWh and 100 kWh (a kWh, or kilowatt hour, is the unit your power bill measures). The discount is delivered at the point of sale through small-scale technology certificates, or STCs, which are tradeable certificates the installer usually claims for you, so you see a lower price rather than a cheque.

The size of the discount is changing. From 1 May 2026 it is tiered by capacity: the full certificate rate applies to the first 14 kWh of usable capacity, 60% from 14 to 28 kWh, and 15% from 28 to 50 kWh, with no certificates beyond 50 kWh. In short, a very large battery earns proportionally less help.

State schemes can stack on top. In Victoria, eligible households can receive a solar panel rebate of up to $1,400. Note the rules tightened on 1 July 2026, when the combined household income cap for the solar panel and hot water rebates fell from $210,000 to $150,000 a year.

Why the loan term costs more than the rate

The loan term can cost you more than the interest rate does. A rebate lowers the sticker price once; a long loan charges you interest every year until it is repaid. Roll a battery into your home loan and stretch it across the remaining 25 years, and the interest can quietly add up to more than the system ever saves on your bills, even at a home loan rate, which is usually lower than a personal loan rate.

Here is the mechanism. Say you add a system to your mortgage and make only your normal repayments. That balance sits there for decades, accruing interest at your home loan rate the whole time. The annual bill saving might be a few hundred dollars, while the annual interest on a 25-year balance could match or exceed it. The fix is not always a different loan; it is a shorter timeframe. Paying the amount off over, say, four to seven years keeps the interest small enough that the bill savings can still come out ahead.

What are your options for financing it?

You have a few ways to pay for it, and the right one depends on your circumstances. The aim is to capture the rebate while keeping the repayment period short.

• Your own savings or available redraw: paying from money you have already put aside is the cheapest option, since there is no interest at all. If your savings sit in your home loan, redraw (borrowing back extra repayments you have already made) is the next best thing, but only if you keep lifting your repayments to clear it quickly rather than spreading it over decades.
• Refinancing: if you are reviewing your mortgage anyway, folding in a battery can work, provided you set a separate, shorter repayment plan for that portion instead of letting it ride the full loan term.
• Green personal loans: a number of personal loan providers offer green loans for exactly this purpose, and they usually come with a discounted rate compared with their standard personal loan. It is an unsecured option, so there is nothing to add to your mortgage, and the terms are short enough that you are not paying it off for decades.

Whichever you choose, run the numbers on total interest, not just the monthly repayment. A small monthly figure over 25 years is often the most expensive path.

The bottom line

The rebate sets the price, but the loan term sets the real cost. Solar and a battery may save you money over time, and the current discounts make the entry price lower than it has been, but stretching the cost across a full mortgage can hand those savings back to the lender in interest. Keep the repayment period short, check whether a green option applies to you, and compare total interest against the estimated bill saving before you commit.

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