CEFC signs deal to bring affordable solar & energy storage loans to Australian homes

Australia’s Clean Energy Finance Corporation has signed its first major deal with a non-bank lender that will target cheap loans for low-carbon products including electric vehicles, rooftop solar arrays and battery storage.

The CEFC says it will provide $50 million to FirstMac, a non-bank lender with a $6.5 billion portfolio that issues finance primarily via on-line portals.

The deal follows financing agreements with two of the big four banks – $120 million with NAB and Commonwealth – that also targets low emissions transport as well as solar systems, battery storage and energy-efficient equipment.

The idea is to offer cheaper finance to buyers of these products. To some on the best credit rating, it will be up to 25 per cent cheaper than for “non-green” products.

Meg McDonald, the deputy CEO of the CEFC, says the aim is to establish a new asset class in Australia that can then attract financing initiatives such as securitisation (where loans are packaged up and sold as bonds, or in this case green bonds) and bring in more investment.

“What we are doing is creating this as an identifiable asset class in the minds of financing circles,” McDonald said. “Because right now it is not. We are trying to prove it is an asset class, and a rapidly growing one.”

Around half of the $50 million available to FirstMac will be reserved for low emission vehicles. The remainder will help increase the commercial uptake for residential rooftop solar PV and inverters, as well as energy efficient technology.

Leasing for solar thermal, including for hot water, and for batteries that form part of a solar installation, is also eligible.

The CEFC financing will initially focus on FirstMac’s existing 25,000 mortgage customers, particularly for vehicle and solar opportunities. Additional consumer interest is expected to be driven by its online platform and its network of brokers and equipment manufacturers.

© 2015 Solar Choice Pty Ltd

Giles Parkinson