Electrification Loans for Everyone – Rates Assistance Scheme

Rewiring Aotearoa is advocating for a Electrification Loans for Everyone – Rates Assistance scheme to help New Zealanders afford to electrify their homes with rooftop solar panels and batteries, potentially by offering low-interest finance through councils, similar to existing rates rebate programmes.

This is a way to enable wider adoption of renewable energy privately by home owners. New Zealanders have been slow to move to solar and electrification – unlike Australia where there have been many Federal and State incentives – the latest being home battery rebates.

Green bank loans are often mentioned by solar installation companies but these financing options are not well-suited to many.

For instance, loans for solar panels and electric vehicles are often too short, meaning people have to pay large sums each week, even if the product saves money over time. A low-interest loan with a three-year term can be a strain on the budget so this makes it inaccessible. Simply the complaints we have heard is the green bank loans are; Too Short. Too complicated and cumberssome to apply for. They don’t suit people who currently don’t have a mortgage.

A Rates Assistance Scheme (RAS) aims to make electrifying your home more accessible by addressing the upfront cost barrier.

Auckland Council used to have a Retrofit your Home schemes but this was stopped in 2020. Reason given was

“In 2020 we discovered some problems with the way we managed interest calculations on our Retrofit Your Home loans.

As a result we have:

closed the scheme
amended the accounts

We are glad to hear Auckland Council is supporting this new nation wide Rates Assistance initiative.

The proposed scheme would leverage existing council infrastructure (e.g rates collection) to offer low-interest finance, potentially through deferred payment options or even deferred until the property is sold.

This approach could help homeowners who are asset-rich but cash-poor. The scheme could potentially be extended to other electrification initiatives like large electric appliances like hot water heating.

The scheme is envisioned as a mechanism similar to existing rates rebate programmes, which offer financial assistance to low-income ratepayers.

The RAS builds on an established successfulmodel used by councils to access credit via the New Zealand Local Government Funding Agency
(LGFA). Using the LGFA, councils reduce borrowing costs while providing investors with a stable return on investment. It is important to
note that, because the security for the loan is tied to the individual rateable property, the debt fromthese loans will not appear on the books of the councils, or central government.

The government may fund a small portion of the scheme, possibly in the range of $2-6 million, to kickstart it, according to Newsroom.

Apparently the government is actively considering the scheme, with a potential launch timeframe of 18 months.

Electrification Loans for Everyone – Rates Assistance Scheme

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