The truth behind financing EVs and solar

If you've filled up your car lately, you'll know the pain. Petrol prices have surged over 35% in recent weeks, with some forecasts warning we could see $4 or even $5 per litre if the Strait of Hormuz crisis continues. Diesel's even worse - up over 80%. It's brutal timing for household budgets already stretched thin.

With all this uncertainty, more and more Kiwis are asking: is now the time to make the switch to an EV, solar, or both? The Government recently announced a $52.7 million investment to more than double the number of public EV chargers nationwide, and EV sales were up 10.5% in February compared to last year - a trend that's only accelerating as fuel prices climb.

I've been on the fence about writing this for a while, but given the current energy crisis, I thought I'd share my own real-world experience of going electric - with actual numbers.

My situation: Before and after

Before making any changes, here's what we were paying:

• Power bill: $300/month

• Gas bill (heating & hot water): $500/month in winter, around $200/month in summer

Averaging that gas bill out across the year gives us roughly $350/month. So we were paying around $650/month for energy - and that's before even thinking about petrol!

Here's what we did:

• Solar system with battery: $16,000

• Replace gas water heating with a hot water heat pump: $7,000

• Replace gas heating with heat pumps: $15,000

• Total: $38,000

And here's what we pay now:

• Power bill (winter max): $180/month

• Power bill (summer): $50-$100/month

• Gas bill: $0

We financed the whole lot on an interest-free five-year loan through Westpac (more on that below). The repayments work out to around $633/month - which is actually less than the $650/month we were paying before for power and gas combined. We've cut our bills from day one, while also building equity in our home and eliminating our reliance on gas and the grid.

Once the loan's paid off, we'll only be paying around $115/month for power on average. That's a saving of over $6,400 per year compared to what we were paying before.

Here's what that looks like over 10 years:

• Years 1-5 (paying off loan): $650/month down to $633/month = $1,020 saved

• Years 6-10 (loan paid off): $650/month down to $115/month = $32,100 saved

• 10-year total: $78,000 down to $44,880 = $33,120 saved

That's over $33,000 in savings over ten years - and the system will keep delivering for decades beyond that.

Oh, and our solar system fully charges both our EVs. No petrol costs at all.

What about buying an EV?

Let's talk running costs, because this is where EVs really shine.

If you're spending $100 a week on petrol (pretty standard for many households right now), that's $433/month or $5,200/year going straight out the exhaust pipe.

Now let's compare that to running an EV:

• Charging costs: An efficient EV uses around 15-18 kWh per 100km. For a typical year's driving (~14,000km), that's roughly 2,400 kWh. At average power prices (~30c/kWh), that's about $720/year ($60/month). If you have solar, it's essentially free.

• Road User Charges (RUC): EVs pay RUC instead of fuel taxes - currently around $76 per 1,000km, so about $1,064/year ($89/month).

Annual running costs:

Petrol car:

• Fuel: $5,200/year

• Total: $5,200/year

EV (no solar):

• Charging: $720/year

• RUC: $1,064/year

• Total: $1,784/year

• Annual saving: $3,416

EV (with solar):

• Charging: $0

• RUC: $1,064/year

• Total: $1,064/year

• Annual saving: $4,136

Over 10 years:

• Petrol car: $52,000

• EV (no solar): $17,840 - saving $34,160

• EV (with solar): $10,640 - saving $41,360

That's potentially over $41,000 saved over 10 years if you pair an EV with solar - or $34,000 even without it.

The real kicker

If you combine solar with an EV (like we have), your car essentially runs on sunshine. Our two EVs cost us virtually nothing to run beyond RUC. Compare that to $100+ a week at the pump - it's not even close.

What finance options are available?

Here's a quick summary of what the banks are offering:

Westpac - Greater Choices Home Loan:

• Amount: Up to $50,000

• Rate: 0% interest

• Term: 5 years

ASB - Better Homes Top Up:

• Amount: Up to $80,000

• Rate: 1% p.a.

• Term: 3 years

ANZ - Good Energy Home Loan:

• Amount: Up to $80,000

• Rate: 1% p.a.

• Term: 3 years

BNZ - Green Home Loan Top-Up:

• Amount: Up to $80,000

• Rate: 1% p.a.

• Term: 3 years

Kiwibank - Sustainable Energy Loan (not for EVs):

• Amount: Min $5,000 (no max)

• Rate: Variable

• Term: 7-10 years

• Bonus: Kiwibank contributes up to $2,000 over four years towards your system ($800 at the end of year one, then $400 each year for the following three years). It's specifically for renewable energy systems like solar, small-scale hydro, wind, or geothermal.

Things to keep in mind

These loans are usually attached to your mortgage, so you'll need to meet standard lending criteria. The loan term often matches the offer period (e.g. three or five years), which means higher repayments than a standard 30-year term - but you'll pay off the debt fast.

Also, this type of lending takes a few weeks to arrange, so get in early if you're thinking about it.

How I can help

If you're keen to explore your options, I'm happy to help you consider all the possibilities and make sure the numbers actually stack up for your situation. I can also connect you with great local solar installers who know their stuff, and help you navigate the finance side of things from start to finish.

Whether you're thinking about solar, an EV, heat pumps, or all of the above - just reach out and let's chat. It might be the best financial decision you make this year.

This is not personalised financial advice. Information included is intended to be informative only. Products mentioned may change terms and offerings from time to time. Please don't act on anything mentioned here without seeking advice that takes your own financial position and goals into account.