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Households turn to lenders to fund solar and batteries as savings run out | Solar Heroes - Battery Hybrid, Off Grid & Grid Connect Solar System Specialists

Households turn to lenders to fund solar and batteries as savings run out

5th October 2023

The big stash of savings Australians put away during the Covid-19 pandemic is running out and people are increasingly turning to specialised finance providers to pay for rooftop solar, batteries and electrification.

But that isn’t putting new – or existing – solar households off investing in clean and efficient energy, says Brighte CEO Katherine McConnell.

“We see [rooftop solar] markets still growing about 10 per cent annually,” McConnell told One Step Off The Grid.

“What’s interesting is solar installers are telling us that 30 per cent, some are even saying 40 per cent of their installation work is now for households that have solar.

“They’re upgrading. They’ve had a great experience. It’s paid itself back and they’re saying I want more, I want nine kilowatts on my roof.”

And they’re increasingly using debt to power the expansion. McConnell says about 30 per cent of residential solar installations through her business is paid for with debt.

She names buy-now-pay-later, credit cards and personal loans as preferred consumer leverage, but also says the federal government’s $1 billion in cheap loans for home electrification will dominate when it is introduced.

Governments must take lead

Brighte is a financier of sustainable home additions, from solar panels through to renovations, and also offers a payment platform that organisations use to deliver lending options.

For example, the company facilitates the ACT and Tasmanian governments’ household sustainable loans schemes.

Where governments need to do more, McConnell says, is around the adoption of household batteries which don’t have a viable payback period but are a community benefit because they help with the transmission and distribution of energy.

Battery installations are about 10 per cent of solar installations because the payback period is at best a decade.

“I think what you need is government intervention because batteries delays generation being built, so I think that there is a role for government to play in subsidising household batteries,” she says.

Batteries and solar – in fact anything that allowed households to generate their own power over the longer term – would have been a better bet for the federal government’s most recent budget, rather than short term power bill subsidies of $500 for individuals and $650 for businesses, McConnell believes.

“I understand the dual motivation there around seeking to reduce inflation whilst concurrently supporting household affordability of energy and I think with that dual motivation, it was the right lever to be able to pull,” she says.

“[But] getting more households on solar would have been a far more impactful use of taxpayers funding.”

Not another pink batts

Reaching state government decarbonisation targets will require more household participation and getting more solar and batteries inside and on to houses.

Governments have learned from the last time a home sustainability policy was rushed – the pink batts disaster in 2009 which was designed to counter the effects of the 2008 global financial crisis and saw 94 house fires and four deaths.

McConnell says the guardrails are in place this time, as regulators, government departments and companies like Brighte vet the installers.

Furthermore, the mindset around sustainable homes has moved far enough forward that the ACT is even dipping its toes back into thermal efficiency by providing concessional finance for insulation.

We haven’t touched it because of the sins of our forefathers. And so we need to go back to some really simple things around energy efficiency.

“And so, you know, just huge kudos to the ACT working with industry, the Energy Efficiency Council and developing a whole process for how they accredit who participates and how they provide training.”

Must develop a unified approach

McConnell is another voice calling for a single national approach to sustainability, which in Brighte’s case means home sustainability.

“You’ve got very ad hoc programs but I think there’s a real role, be it at a federal, state or local level, to have a really consistent approach to what are we going to do to support household generation,” she says.

“We can’t afford to waste time. We can’t afford to waste money. If we had a really clear strategy, I think we could start making huge inroads much sooner.”

State and federal policies will need to coordinate in what is likely to be an iterative process over time, to create standards for issues such as enforceable rental insulation standards and the regulatory approach to gas disconnections.