The Clean Energy Finance Corporation (CEFC) has confirmed its first investment via the Household Energy Upgrades Fund (HEUF) that will provide Australians with access to $1 billion (USD 670 million) in low-interest loans to help them install solar, batteries, heat pumps and other appliances to help electrify homes.
In its inaugural HEUF investment, the CEFC said it will work with fintech lender Plenti Group to unlock $60 million in cheap finance for household electrification.
The first funding allocation will allow Plenti to offer loans to households with interest rate discounts of up to 2.74% per annum and as much 3.34% per annum if households sign up to a virtual power plant plan to through Plenti’s point-of-sale platform, GreenConnect.
Applications for these loans will open on 5 June 2024 through Plenti.
Greens Leader Adam Bandt welcomed the beginning of the funding rollout but said the federal government must now accelerate the program, which is part of a broader funding package that includes $300 million to support upgrades to social housing which will be co-funded and co-designed with the states and territories.
Another $300 million will be allocated to the Small Business Energy Incentive to help companies with a turnover of less than $50 million become eligible for an extra 20% deduction on energy-efficient items such as solar panels.
Bandt said it is important the CEFC pick up the pace and allocate the remaining money it has available to loan under the scheme.
“We need the rest of the $1.7 billion electrification funding … rolled out for renters and apartment dwellers, in public housing and for small business,” he said.
“We also need to see more funding in the Budget update in December and a much bigger program to electrify Australia.”
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One third of Australian households already have solar but data from the Climateworks Centre shows the nation’s existing 11 million homes are still responsible for more than 25% of electricity consumption and more than 10% of total carbon emissions.
CEFC Chief Executive Ian Learmonth said increasing the uptake of renewable energy, storage and related infrastructure is 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. “This means we can better manage energy demand and ultimately contribute to the creation of a stronger, more reliable and cleaner grid.”
The CEFC said it is continuing to work with a range of lenders to develop products with the potential to be financed through the HEUF, with further commitments expected in 2024.
“The CEFC has engaged extensively with the industry and identified strong market interest, including proposals outlining more than $850 million in potential green loans from 16 financiers,” Learmonth said.
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