Labor pumps $160m into Westpac fund offering lower-interest loans for household energy upgrades
The Albanese government has pumped $160m into a major bank fund that offers discounted loans to pay for energy efficient upgrades to homes.
The investment was announced on Sunday as part of the household energy upgrades fund in last year’s federal budget.
However the loans are only available to those who already have another large home or investment loan with Westpac, according to conditions outlined on the bank’s website.
The government said the energy upgrades fund would help about 110,000 households get low-cost loans for solar panels, batteries, hot water heat pumps, electric vehicle chargers, induction cooktops and other energy-related home improvements such as double glazing and insulation.
The lower-interest rates offered under the scheme could mean that customers with a $30,000 loan saved about $3,475 in interest over 10 years, compared with Westpac’s basic variable rate home loan, Labor said.
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The loans launched with a variable interest rate of 4.49%, compared with Westpac’s advertised 6.44% variable rate for home loans.
“These competitive-rate loans will give customers the freedom to choose how to upgrade their homes and to make them more energy efficient and save on their bills,” the climate change and energy minister, Chris Bowen, said in a statement.
According to the bank’s website, the loan can be from $4,000 up to $50,000 on a 10-year maximum term. To be eligible, the applicant must already have or be approved for a Westpac home or investment loan of at least $150,000, and the energy upgrade is for the property that secures the loan.
The assistant energy minister, Josh Wilson, said making homes and businesses more energy efficient could ease cost-of-living pressures and reduce emissions.
“This 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,” he said.
In May, the government committed $60m through the lender Plenti to support cheaper finance for energy efficiency upgrades. It was the first round of loans announced under the fund.
The household energy savings plan was flagged in later 2022 as part of a Labor-Greens deal to pass laws that capped gas prices to limit the rise in electricity bills. The government agreed then there would be a “significant” budget package targeted at low-income people and renters.
The announcement of the fund also came after a campaign led by Saul Griffith, a former energy adviser to the US government and now head of Rewiring Australia, who had suggested a $13.5bn package to electrify homes.
Bowen has previously said Australia’s housing stock was mostly inefficient, reflected in Australia being ranked 58th out of 63 countries for per capita energy use.
