Most people don’t have $14,000 sitting spare for solar, and the good news is you don’t need it. New Zealand has some of the cheapest solar finance in the developed world, because the major banks subsidise it heavily — and when the numbers line up, something rather satisfying happens: the loan repayment can be less than the power-bill saving, so the system pays for itself from the very first month. But the headline “0–1%” rates carry a catch worth understanding before you sign. Here’s how the options really compare.
Bank green loans — usually the cheapest money you’ll find
The big banks offer discounted “green” or “sustainable energy” lending specifically for things like solar:
- Westpac is often the standout — 0% interest for five years on up to $50,000, held for the full term with no nasty reversion.
- ANZ, ASB, and BNZ typically advertise around 1% p.a., but read the fine print: the discount usually applies only for the first three years, after which the balance rolls onto the bank’s standard floating rate — around 7–8% in 2026.
- Kiwibank offers a sustainable-energy lending option too, useful if your equity is tight.
Because these rates sit far below ordinary borrowing, a green loan is how most Kiwis fund solar. The catch is entirely in the shape of the discount — which brings us to the thing to watch.
The catch in the headline rate
“0–1%” sounds unbeatable, and it can be — but the discount window is what matters. A three-year 1% rate that then jumps to 7–8% is a very different deal from Westpac’s five-year 0% held to term. So never judge a green loan on the teaser rate alone. Ask:
- How long does the discounted rate last?
- What rate applies after the discount window?
- Can I make extra repayments, penalty-free, to clear as much as possible while it’s cheap?
Look at the whole-of-term cost, and plan to pay down hard during the cheap years.
How the loans are structured
Most bank green loans are mortgage top-ups — secured against your home. That security is exactly why the banks can offer rates so far below a personal loan or hire purchase. The trade-offs:
- You generally need a reasonable amount of equity in your home (commonly your mortgage under about 80% of the property’s value).
- The loan sits against your property, so it becomes part of your overall home lending.
- Banks usually require your quote to come from an installer meeting recognised industry standards.
If you don’t have the equity, a sustainable-energy personal loan (like Kiwibank’s) may still work, though rates are higher than a secured top-up.
Retailer and interest-free deals
Some installers partner with finance providers to offer long interest-free terms — occasionally several years. These can be fine, but check the standard interest rate that kicks in if you don’t clear the balance within the promotional period; it’s often steep. As with bank loans, the real question is what happens after the honeymoon.
Cash vs finance
If you have the cash, paying outright avoids all interest and is the simplest path. But financing at 0–1% can still make sense even then, because the loan costs less than you’d likely earn leaving the money invested elsewhere — and it keeps your capital free. It’s a personal call about liquidity and risk appetite; there’s no universally right answer.
Can the repayment really beat the saving?
This is the appealing case, and it’s achievable. Take a $14,000 system on a five-year 0% loan — that’s about $233 a month in repayments. If the system saves a household $160–$190 a month on power, the gap is small; and for a higher-using home the saving can fully cover the repayment from day one. Then, once the loan is paid off, the entire saving is yours for the system’s remaining 15-plus years. You’ve effectively bought decades of cheaper power with money that was barely out of pocket.
What to check before you sign
- The whole-of-term cost, including the rate after any discount window.
- Equity requirements, and whether it’s secured against your home.
- Any installer conditions the lender imposes.
- That you can make extra repayments without penalty during the cheap period.
- Confirm current rates directly with the lender — these move, and offers change.
The smartest move is to size the system to a sensible repayment, so the monthly cost sits comfortably under your saving. Our free assessment helps match a system to a payment that works for your budget.
Sources: EECA — understand home energy loans. Rates were current in early–mid 2026; confirm with lenders before applying, as terms change.