How households can pocket thousands on energy saving upgrades

Homeowners looking to install solar panels and other energy-saving measures can save thousands of dollars in loan costs, with a new national fund enabling discounted loans for green upgrades.

Aussies wanting to cut energy bills and make their homes more environmentally friendly can apply for discounted green loans from lender Plenti from June 5 to finance rooftop solar, home batteries and other energy efficiency projects.

For example, the discounted loans could save a household up to $3,531 in interest costs on a $25,000 loan over seven years, compared to Plenti’s standard green loan rate. 

The federal government-supported Clean Energy Finance Corporation (CEFC) has provided Plenti with $60 million to offer cheaper loans to households with interest rate discounts of up to 2.74% per annum. 

In addition, customers can get a further 0.6% discount on the green loan if they sign up to a virtual power plant – a network of connected solar batteries – through Plenti. 

The $60 million investment is the first allocation under the federal government’s $1 billion Household Energy Upgrades Fund (HEUF).  

The fund is expected to help more than 110,000 Australian households to lower their energy bills through making lower cost loans available, according to federal climate change and energy minister Chris Bowen.

Home owners will be able to apply for discounted green loans to install rooftop solar and other energy efficient upgrades from June 5. Picture: Getty

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“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. 

Cutting energy bills 

Energy efficiency is highly valued by the majority of Australians when it comes to their housing choices, according to the PropTrack Origin Australian Home Energy report.

PropTrack senior analyst and report author Karen Dellow said the financial factor was ‘really important’ for both buyers and renters.

“When we asked them the reason for valuing energy efficiency ratings in their property, the majority of buyers and renters wanted to reduce their regular energy bills,” Ms Dellow said.

While newly built homes must meet energy efficiency standards, 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%, according to the federal government. 

Plenti chief executive Daniel Foggo said consumers wanted lower energy bills and to reduce their household emissions but had been put off by the high upfront costs.  

The majority of Australians highly value energy-efficient homes. Picture: Getty

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“Discounted finance will help households overcome these cost barriers, and help unlock faster uptake of energy efficiency equipment, reducing energy bills and accelerating Australia’s transition to net zero,” Mr Foggo said. 

Retrofitting Australia’s homes 

Australia’s existing 11 million homes were responsible for more than 10% of total emissions and more than 25% of electricity consumption, according to research from Climateworks Centre. 

CEFC chief executive Ian Learmonth said increasing the uptake of renewable energy, storage and related infrastructure was critical to Australia’s net zero ambitions and clean energy transition.  

“The installation of more rooftop solar, home batteries and energy efficiency equipment will help unlock additional clean energy capacity,” he said.  

More than seven million homes were built before national codes included energy performance standards. Picture: Getty

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Dan Cass, executive director of independent group Rewiring Australia, welcomed the new discounted green loans and said household electrification was the fastest and most cost-effective way to reduce emissions and bring down power bills.  

“One third of households already have solar and these loans will help others to reap the benefits of self-generated electricity costing only five cents per kilowatt hour, the world’s cheapest energy,” Mr Cass said.

The CEFC is working with other lenders to deploy the HEUF’s outstanding $940 million into other proposals to make homes more energy efficient, including green mortgages.