This in depth guide will educate you on the fundamentals of Electric Vehicle ownership, while also debunking some well publicised myths!
The aim of this guide is to educate you on the fundamentals of solar energy and battery storage systems, and to enable you to hold your own with even the most battle-hardened solar salesperson!! But more importantly it should help to ensure you get the right system for your needs and at the right price.
Charged up and ready to role. So how do you fuel your EV dream financially? Read on to explore the different financing options to get you on your journey to low cost, low emission motoring. The different financing options covered in this article are:
What is a novated lease? A novated lease is a way to finance a car that combines salary packaging with car leasing. It involves three entities: you, your employer, and a novated lease provider. Here's a breakdown of how it works:
Potential benefits of a novated lease Utilising a novated lease means you will reduce your taxable income and could save significant amounts of money compared to other financing options. Historically, novated leasing triggered additional fringe benefit tax payments for employers for any portion of time that the vehicle was used for personal use. Many employers weren’t prepared to cover this additional tax and either passed it on to the employee or chose not to offer car leasing schemes. However, from 1 July 2022 fringe benefit tax was eliminated on EVs under the luxury tax threshold (currently $89,332). This change has rapidly increased the uptake of employers offering novated leases for EV, and the uptake of such leases by employees. EV financing option The above chart is based on a three-year term, with the lessee taking full ownership at the end of the lease, for a Tesla Model Y RWD. It includes registration, CTP and insurance costs but excludes other costs. For full-time employees, novated leasing is likely to be the cheapest option for acquiring an EV. Especially for those in higher tax brackets. Additional benefits may also be possible by salary sacrificing other costs associated with ownership such as electricity and maintenance. If you are self employed then it may be advantageous to purchase your EV through your business given no FBT is payable on it for personal use; you should discuss this further with your accountant. For most people, car financing to purchase an EV is likely to be the most expensive option. Downsides While there are many benefits to a novated lease there are also downsides to consider before you decide. Including:
Data and assumptions Notes:
(1) Based on three-year lease/ownership period for a Tesla Model Y. The vehicle is fully owned by the consumer at the end of this three-year period in all examples. (2) Novated lease costs based on the average of quotes provided by two leading novated lease providers – Fingo and Novated Lease Australia. The cost includes registration, insurance and an end of lease payment to take full ownership of the EV after 36 months. (3) Purchase price as per Tesla website. Includes stamp duty, GST and the first year of green slip, registration and insurance costs. (4) Registration, green slip and insurance based on actual 2023/24 costs for a Tesla Model Y. (5) Mortgage example assumes all the upfront cost of $66,092 is added to the home mortgage at an interest rate of 6.3% (being the average Australian home loan rate per money.com.au). Interest and principal is then assumed to be repaid over three years in line with the CBA home loan calculator. Car finance costs as per carclairty.com.au, including a $12,000 upfront deposit and no end of term payment. In this case, Car Clarity quoted an APR of 8.8% but this could differ depending on your credit rating. Final word EVs are becoming a compelling choice for many drivers. Quicker acceleration, smoother driving, superior technology, minimal fuel and maintenance costs, no CO2 emissions, no air pollution…the list goes on. The price of EVs has dropped significantly in the past two years. Many models are now comparable in cost, or even cheaper, than their gasoline or diesel counterparts. Novated leasing can further enhance affordability by leveraging tax benefits, making EV ownership a more realistic option for a broader range of drivers. If you are an in the upper tax bracket you can now acquire a Tesla Model Y using a novated lease for close to the same price as a Toyota Corolla using traditional car finance!! Heat up your savings! The aim of this guide is to educate you on the different options available to you for your hot water. It analyses the cost, emissions and the advantages and disadvantages of each. Types of hot water system There are four main types of hot water system in use in Australia today: 1. Continuous Flow Gas As the name suggests these systems heat water as you need it. The system works by having cold water flow through copper piping, and heat is then applied directly to the pipes. A continuous flow of gas and sufficient ventilation is required for this system. 2. Gas Storage Storage water units are just that – they store hot water for use when your home needs it. Gas Storage hot water units use a gas burner to continuously heat and maintain water at approximately 60 °C. Sufficient ventilation is also required for these systems. 3. Electric Storage Storage Electric hot water systems are one of the most commonly used systems in Australia, including in the majority of apartment and unit blocks. They work similar to a Gas Storage system except they use electricity and an element to heat the water. 4. Electric Heat Pump A Heat Pump system has some similarities to an Electric Storage system, they both have a tank and use electricity as the source for the heat. However, instead of an element to heat the water, a heat pump extracts heat from the ambient air to heat to the water. They can operate in temperatures as low as minus 10 degrees Celsius. The main advantage of this system compared to the Electric Storage system is that it uses significantly less electricity. These systems can generally only be installed outdoors or in a well-ventilated garage. Comparison of cost and emissions Pinpointing the exact cost savings and emissions impact of a new hot water system can be tricky. Factors like tank size, household size, and hot water usage all play a role. The basis of the above analysis is actual real-world data from a five-person household that recently switched from Continuous Flow Gas to an Electric Heat Pump system (with some assumptions for Electric Storage and Gas Storage). The good news? This switch to a heat pump resulted in significant cost savings, regardless of whether the system is powered by solar panels or off-peak grid electricity. While solar-powered Heat Pumps are unbeatable for emissions, it's important to consider the current state of the electricity grid. In NSW, VIC and QLD, where fossil fuels still dominate power generation, a Continuous Flow Gas system might currently have a lower carbon footprint than a Heat Pump running off the grid. However, as these grids transition towards renewable sources, heat pumps will become the clear winner in terms of emissions reduction. For those in Tasmania and South Australia, where renewable energy makes up a larger portion of the grid, Heat Pumps may already boast a lower carbon footprint compared to Continuous Flow Gas systems. Or for those people in other states who operate their heat pumps during the middle of the day when the grid has a higher portion of renewable energy. Electric Heat Pump – Key considerations 1. Free heat pumps are expensive!! Choose a quality brand and product Standard Gas and Electric Storage systems, and even Continuous Flow Gas, are relatively simplistic pieces of equipment with minimal parts meaning maintenance should be relatively easy. Electric heat pumps do have a multi-component structure, including the condenser, evaporator, compressor, expansion valves, and filters. This means there are more potential points of failure compared to simpler heating systems. Therefore, if you choose to switch to an electric heat pump, consider investing in a well-established, reputable brand known for reliability and durability to minimize the risk of breakdowns. Many consumers are tempted by heavily discounted or "free" electric heat pump systems. These offers should be avoided. Often, such systems are either prone to early failure or are unable to meet the household’s hot water requirements. 2. Refrigerants are extremely harmful to the environment Hydrofluorocarbons (HFCs) are widely used as the refrigerant in Electric Heat Pump Systems. HFCs have a huge global warming impact. For example:
However, some systems are far more environmentally friendly using CO2 or propane as the refrigerant (GWP of 1 and 0.02 respectively). Unfortunately, such systems generally come with a premium price tag. Before investing in an Electric Heat Pump do your research to understand the refrigerant used and its Global Warming Potential. Try and choose a model that uses a refrigerant like CO2 or propane. If this isn’t possible, then invest in a premium brand and properly maintain it to minimise the risk of any leaks into the environment. 3. What size tank do I need? Follow the below as a general rule of thumb:
Conclusion If you have solar panels and/or a home battery, investing in an Electric Heat Pump should be a no-brainer, both financially and environmentally, no matter what hot water system you currently have. This is, of course, provided you invest in a reputable, high-quality brand that is reliable and ideally avoids the use of harmful HFC refrigerants. If you don’t have solar or a home battery then the decision is not quite as clear cut and it depends on what your current system is:
Appendix - system comparison and assumptions
🚘 Congratulations on joining the EV Revolution! Here are some top tips to help you smoothly transition to your new vehicle: 1. Master the Charge: Understand the Basics ⚡
One of the first things you should do is familiarise yourself with the different charging options available to you:
2. Planning Your Home Charger Placement for a Hassle-Free Charge🏠 Before you install your home EV charger, take a moment to consider:
Quotes to install a Home Charger that you will find online can range from $1,500 to $2,000. Local recommendation: If you live in the Northern Beaches area, consider Sole Electrical. They have experience installing chargers in the region and might offer competitive rates compared to generic online searches. 3. Driving on Sunshine: Charge of off Excess Solar🌞 Solar and EVs are a match made in heaven. If you have solar you are going to want to align charging to production as much as possible.
4. Shave Hours off Your Commute: EVs Access to Transit Lanes 🚦 EVs in NSW can now use transit lanes regardless of the number of occupants. This perk, originally introduced in 2022 to boost EV adoption, has now been extended to 2025. Read more here or visit the NSW Government website. 5. Unlock Charging Freedom: Essential Charging Cables for your EV🔋 Didn't get any charging cables with your new electric vehicle? No worries, here are two cables worth keeping in your trunk for ultimate charging flexibility:
6. Be Prepared, Be Powered: Effortless Charging on the Go 📍 Some cars take the guesswork out of charging by automatically integrating Supercharger stops into your navigation system based on your estimated battery usage. This ensures a seamless journey with convenient charging breaks. But what if your car doesn't have this feature, or you want to explore options beyond Superchargers? Here's where the PlugShare app comes in. This handy app acts as your global EV charging station database, allowing you to locate both Superchargers and Destination Chargers all in one place. 7. Power Up your Journey: Essential Charging Apps for your EV 📱 To access charging stations on the go, you'll likely need a dedicated app. While the ideal scenario of a single, unified app is still in development, you’ll need the below (and possibly others depending on your journey) in the meantime. Here's the good news: most of your charging will likely happen conveniently at home. But for those times you're exploring new places, consider downloading these apps before you need them. Creating accounts while you're relaxed at home will save you time and frustration when you're ready to charge up on the go. 8. Charging your EV at Home: Single Phase Power is all you Need🔌 Upgrading your home from single-phase to three-phase just for EV charging is not necessary. Let's break it down:
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