The Clean Energy Finance Corporation (CEFC) has signed a memorandum of understanding (MoU) with ING Australia to deliver a low-rate green home loans sub-account for renewable technologies.
Under the MoU, the CEFC will consider investing up to $75 million to help finance the $150 million ING Green Upgrade Loan program as part of the third investment from the Household Energy Upgrades Fund (HEUF).
The CEFC finance is expected to help deliver a fixed rate of 3.74 per cent, representing a discount of two per cent on an ING Fixed Rate Home Loan for the first five years of the loan. The CEFD said that this means that customers could save up to $5000 over the first five years of an ING Green Upgrade Loan balance of $50,000.
Under the ING Green Upgrade Loan, it is expected that eligible ING mortgage customers can apply to borrow up to $50,000 to install a range of clean energy technologies to improve energy efficiency, reduce energy use and cut emissions.
The discount rate will be available to ING mortgage customers, with eligible technologies including battery ready solar PV, battery and inverters.
Borrowers will be able to utilise the Home Energy Helper, delivered in collaboration with BOOM! Power, which can recommend appropriate clean energy technology upgrades designed to reduce energy costs and emissions based on a household’s existing systems and appliances.
CEFC CEO, Ian Learmonth, said helping households lower their carbon footprint is a critical factor in achieving net zero emissions by 2050.
“Our work crowding in additional private capital through the HEUF will help deliver a catalytic outcome, providing low-cost financing together with a range of co-financiers for home upgrades that improve energy performance.”
The CEFC said Australia’s existing eleven million homes are responsible for more than ten per cent of total emissions and more than 25 per cent of electricity consumption.
ING CEO, Melanie Evans, said, “Household emissions are one of the biggest contributors to Australia’s carbon footprint which is why we are doing all we to can to help customers upgrade their homes to reduce their household emissions.
“We’ve designed our Green Upgrade Loan following customer and mortgage broker feedback that the retrofitting process is complex and time consuming. If we want to accelerate decarbonisation, we need to remove the complexities and barriers that are stopping people from making their homes more energy efficient. We have created an experience that is stress free and customer focused.”
The Federal Government has allocated $1 billion to the CEFC to create the HEUF and fast-track sustainability improvements in existing housing by providing discounted consumer finance through a broad range of co-financiers.
The CEFC said it has engaged extensively with the sector and received proposals from a wide range of financiers, including major banks, mutual banks, non-banks and fintech innovators. The proposals covered green mortgages, green personal loans and other innovative green finance products to improve home energy performance for homeowners, renters and strata properties.
The CEFC also said it has received proposals for investment opportunities worth more than $850 million in green loans. It has since announced investments via the HEUF worth some $220 million and continues to work with a range of lenders to develop products with the potential to be financed through the HEUF, with further commitments expected in 2025.
The HEUF builds on the CEFC experience in designing and leading the green home and personal loan markets, and the uptake of clean energy technologies, through its consumer finance programs, as well as investments to help improve energy efficiency across the property sector.
