Solar energy is becoming increasingly popular around the world, and Singapore is no exception. The city-state has set an ambitious target of achieving 2 gigawatt-peak (GWp) of solar deployment by 2030, up from the current 260 megawatt-peak (MWp). To meet this target, the government is encouraging businesses and homeowners to install solar panels through various incentives, including solar loans.
What is a solar loan?
A solar loan is a type of financing that allows homeowners and businesses to install solar panels without having to pay the entire cost upfront. Instead, the borrower takes out a loan to cover the cost of the solar panels, and repays the loan over time with interest.
There are several benefits to taking out a solar loan. Firstly, it allows you to install solar panels without having to pay the entire cost upfront, which can be a significant expense. Secondly, the interest rate on a solar loan is often lower than the interest rate on a traditional loan, as the solar panels serve as collateral for the loan. Finally, installing solar panels can lead to significant savings on electricity bills, which can help offset the cost of the loan.
Types of solar loans in Singapore
There are two types of solar loans available in Singapore: secured and unsecured.
Secured solar loans require collateral, such as the solar panels themselves or the borrower’s property. Because there is less risk for the lender, secured loans often come with lower interest rates and longer repayment terms. However, borrowers should be aware that if they default on the loan, the lender may repossess the collateral.
Unsecured solar loans do not require collateral, but they typically come with higher interest rates and shorter repayment terms. This is because there is more risk for the lender, as they have no collateral to seize if the borrower defaults on the loan.
How to qualify for a solar loan in Singapore
To qualify for a solar loan in Singapore, you must meet certain criteria set by the lender. These criteria may include:
- Minimum age of 21 years old
- Minimum income requirements
- Employment status
- Credit score
- Debt-to-income ratio
Additionally, lenders may require that the borrower provide documentation, such as proof of income and employment, bank statements, and tax returns.
Where to get a solar loan in Singapore
Several banks in Singapore offer solar loans, including DBS, OCBC, and UOB. These loans typically come with low interest rates and longer repayment terms, making them a good option for homeowners and businesses looking to install solar panels.
| Bank | Loan Type | Interest Rate | Loan Tenor | Max Loan Amount | Collateral Required | Min Annual Income | Processing Fee | Early Repayment Penalty |
|---|---|---|---|---|---|---|---|---|
| DBS | Secured | 4.88% p.a. | Up to 10 years | SGD 200,000 | Solar panels or property | SGD 30,000 | No processing fee | 2.5% of outstanding loan amount |
| OCBC | Secured | 4.50% p.a. | Up to 10 years | SGD 100,000 | Solar panels or property | SGD 24,000 | 1% of loan amount | 1.5% of outstanding loan amount |
| UOB | Secured | 4.99% p.a. | Up to 10 years | SGD 100,000 | Solar panels or property | SGD 30,000 | 1% of loan amount | 2.5% of outstanding loan amount |
As we can see, all three banks offer secured solar loans with similar loan tenors and collateral requirements. The interest rates offered by OCBC and UOB are slightly lower than DBS, but DBS offers a higher maximum loan amount.
DBS and UOB both require a minimum annual income of SGD 30,000, while OCBC’s requirement is slightly lower at SGD 24,000. DBS does not charge a processing fee, while OCBC and UOB both charge a fee of 1% of the loan amount. The early repayment penalty for DBS is 2.5% of the outstanding loan amount, while OCBC’s penalty is 1.5% and UOB’s penalty is 2.5%.
In addition to banks, there are also several private financing companies that specialize in solar loans, such as Sunseap Financing and SolarPVExchange. These companies may offer more flexible repayment terms and faster approval times than traditional banks.
Conclusion
Solar loans are a great option for homeowners and businesses looking to install solar panels in Singapore. With the government’s push for more solar energy, and the availability of low-interest solar loans from banks and private financing companies, it has never been easier to go solar in Singapore.
First Solution Group offers solar panel installation in Singapore, making green energy adoption easy and affordable. Reduce bills and environmental impact with flexible financing options. Embrace sustainability today. Contact us today, for a free on-site quotation.
Additional Resources:
Solar Panel Cost
Solar Panel for Condos
Solar Panel Expert Guide
