The Clean Energy Finance Corporation (CEFC) has announced its first commitment under the $1 billion Household Energy Upgrades Fund (HEUF). 

The landmark initiative aims to help Australian consumers access more affordable home energy solutions and finance.

The agency has also identified over $850 million in potential investment opportunities in green loans.

The CEFC's initial HEUF investment will partner with fintech lender Plenti, providing finance to reduce the costs of clean energy technologies for eligible customers. 

This includes investments in solar PV, home batteries, and other energy efficiency upgrades. 

The CEFC's $60 million commitment will facilitate lower finance costs for these technologies through Plenti's green loans, offering annual discounts of up to 2.74 per cent.

Eligible customers can receive an additional 0.6 per cent discount if they join a Virtual Power Plant (VPP) via Plenti’s GreenConnect platform, bringing the total potential discount to 3.3 per cent annually.

Applications for green loans financed through the HEUF will open on June 5, 2024.

The Australian Government has allocated $1 billion to the CEFC for the HEUF to accelerate sustainability improvements in existing homes through discounted consumer finance, working with a variety of co-financiers. 

During a three-month Request for Proposal process, the CEFC received proposals from major banks, mutual banks, non-banks, and fintech innovators. 

These proposals covered green mortgages, green personal loans, and other innovative green finance products aimed at enhancing home energy performance for homeowners, renters, and strata properties.

“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,” CEFC CEO Ian Learmonth said.

“We are confident the market enthusiasm to meet growing consumer demand for green loans will result in competitive financing products that give people more control over their energy use.”

The CEFC plans to continue working with various lenders to develop further products to be financed through the HEUF, with more commitments expected in 2024. 

“Increasing the uptake of renewable energy, storage, and related infrastructure is critical to Australia’s net zero ambitions and clean energy transition.”

The HEUF will build on the CEFC’s previous work in the green home and personal loan markets, aiming to improve energy efficiency across Australia's 11 million existing homes, which account for over 10 per cent of total emissions and more than 25 per cent of electricity consumption.

Modelling by RACE for 2030 suggests that targeted home retrofits could significantly reduce energy bills and emissions. 

It says that a scheme improving one million homes could cut home energy use by up to 9,000 kWh annually per home, reducing emissions by up to 5.8 tonnes of CO2-e per home each year.