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Government offers cheap loans to boost energy efficiency

The Federal Government has announced a new initiative through the Household Energy Upgrades Fund (HEUF) that will offer cheap loans to households to help save on power bills.

In the first round of funding, the government, through the Clean Energy Finance Corporation (CEFC), has unlocked $60 million through lender Plenti to support cheaper finance for rooftop solar, home batteries, and other energy efficiency upgrades for Australian homes.

The investment will help people with older homes and appliances that don’t meet modern energy standards to upgrade and keep money from leaking out the door.

The funding will allow Plenti to offer green loans to households with interest rate discounts of up to 2.74 per cent per annum and as much 3.34 per cent per annum if households sign up to a virtual power plant plan.

Real Estate Institute of Australia (REIA) President, Leanne Pilkington, said making homes and businesses more energy-efficient was a critical way to ease the cost of living and reduce pressure on Australians as well as meet our emissions reduction targets.

“We welcome the release of $60 million in support through Plenti and look forward to engaging with the Australian Government and Plenti to leverage their networks of property owners and investors to drive actual behaviour change to achieve our Net Zero ambitions,” Ms Pilkington said.

“REIA learnt at the UN Global Forum on Building and Construction in March 2024 that retrofitting worldwide has been costed to be a $285 billion dollar task. 

“More will need to be done, and one key consideration is tax incentives for property owners and investors, as suggested by the crossbench and supported by REIA.”

She said households didn’t need more costs placed on them because the government is trying to pursue climate goals.

“The last thing we need is more costs being placed on households as a consequence of Net Zero in the current cost of living crisis when home loan-to-income ratios remain at a 25-year low with no relief in sight,” she said.

Minister for Climate Change and Energy Chris Bowen said the investment would unlock savings for thousands of households.

“These loans will let more Australians put solar panels on their roof or a battery at their back door, providing big savings on their energy bills for decades to come,” Mr Bowen said. 

“The Albanese Government is putting the power back in the hands of households, to give Australians more opportunities to benefit from the energy transition and ease cost-of-living pressures.”

Assistant Minister for Climate Change and Energy, Jenny McAllister, said the government was working to help households with energy costs.

“Australians have led the world in the take up of rooftop solar. Energy performance and electrification is the next frontier,” Ms McAllister said.

“This fund and deal will unlock cheaper finances for households to embrace home energy upgrades and unlock both comfort and savings.”

She said more than seven million homes were built before national codes included energy performance standards. 

“Just upgrading a house from a 1-star rating to a 3-star rating can reduce energy bills by 30 per cent, and the fund will help more than 110,000 households access lower-cost green loans to do just that,” she said.

“Through this fund there are now more opportunities for families to install solar panels, batteries and other energy-efficient devices, to make homes warmer in the winter, cooler in the summer and cheaper to run.”

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.