An ambitious program of federally funded and widely accessible loans to foster a near universal take-up of rooftop solar and associated investments is the centrepiece of the pre-budget submission to the Australian government released on Saturday by Rewiring Australia.
The Australian Financial Review over the weekend reported that the Labor government was “understood to be working on budget initiatives to accelerate decarbonisation and ease household cost-of-living pressures”, with the AFR’s treatment of the story (such as the splash in the weekend print edition, and its prominence almost all day Saturday in the app) strongly intimating that the AFR believes similar measures will be adopted in the upcoming budget.
Rewiring Australia is a non-profit “non-partisan organisation dedicated to representing the people, households and communities in the energy system.”
Key figures such as Saul Griffith reputedly played a major hand in shaping corresponding measures included in the Inflation Reduction Act in the US.
Rewiring propose what they pitch as a Electrify Everything Loan Scheme. In addition to rooftop solar it might support household investments in batteries, efficient electric appliances, and even electric vehicles.
The Electrify Everything Loan Scheme, the proponent contend “builds on the $1 billion Home Energy Upgrade Fund announced by the federal government in the 2023/24 budget.
“Rewiring Australia commends the government on the work to date on the HEUF and believes the concessional interest rates provided through the commercial lenders fund will support a substantial number of middle income home owners electrify sooner.”
They advocate $2 billion to make provision for loan concessions.
“The modelling done by Rewiring Australia shows that Australia could extend [existing measures] with a more flexible loan product that can electrify every dwelling- and at a much lower cost to government budgets than the HECS-HELP loan program.”
Private sector credit, Rewiring say, such as green loans, and mortgages “are more likely to be available and accessed by higher-income homes.
“Addressing the needs of these low-income homes is crucial. If electrification is left to the open market, high-income homes will electrify, while low-income homes will be left with higher gas bills on the widely discussed ‘death spiral’.”
Loans would be secured on the property title, indexed to inflation, and repaid on the sale of the property, Rewiring suggest.
The government would raise the funds with inflation-indexed green bonds.