Removing the cost barrier to electrifying Australian homes

A new Rewiring Australia and NAB project will investigate how finance could help households overcome the upfront cost of switching to electric appliances, solar and batteries.

Recent polling commissioned by the Climate Council found that 65% of Australians want support to purchase an electric vehicle, while more than 79% want help buying energy-efficient appliances and insulation and 75% want support to purchase home batteries. But making the switch at home can require thousands of dollars upfront, even when the technology can deliver lower energy bills over time.
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That is the problem this nine-month project aims to tackle.

Delivered with

The problem

The upfront cost of going electric

Replacing gas appliances with electric alternatives can involve a significant initial investment. A gas hot water system typically costs around $1,500 - $2,200, while an electric heat pump hot water system can cost around $3,500 -$4,500. That means households can face an upfront price difference of roughly $1,300–$3,000 when choosing a heat pump.
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While electric appliances can reduce household energy costs over time, the initial price can still be enough to delay or prevent the switch, particularly for households with limited access to finance or savings. The costs can rise substantially when households combine electrification with solar and battery storage.
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A combined 6.6kW solar and 10kWh battery system can cost around $14,000–$16,500. For a low-income household, pensioner or first-home buyer, finding that kind of money upfront can be difficult, and existing finance products do not necessarily work for everyone.
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Renters, landlords, apartment owners and owners corporations can face additional barriers, while people with self-employed or non-standard incomes may also find conventional lending difficult to access.

Could better finance unlock Australia's electric home transition?

The nine-month project is intended to establish the evidence base, legal architecture and operational blueprint needed to design scalable residential electrification finance models.

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Importantly, the project is not itself a rollout of new finance products. Instead, it will investigate and develop models that could be tested through real-world pilots in a future project.

The project will:

Map existing residential electrification finance options.
Cut emissions by replacing gas with renewable-powered electricity
Undertake consumer research to understand household needs and barriers.
Engage with governments, financial institutions, industry and other stakeholders.
Develop potential pilot schemes that could be tested in the real world.

Who could benefit?

The project is considering finance models that would benefit Australian households,with a particular focus on cohorts underserved by existing finance models, these may include:

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Low-income homeowners
First-home buyers
Young families
Retirees and pensioners
Apartment owners and owners corporations
Renters and landlords
Self-employed households and people with non-standard incomes

These groups can have very different financial circumstances, meaning there may not be a single finance product capable of meeting everyone's needs.Rather than looking at homes individually, the pilot focuses on a concentrated part of the electricity grid.

Key figures

65%

of Australians want support to purchase an electric vehicle.

79%

of Australians want support to buy energy-efficient appliances and insulation.

75%

of Australians want support to purchase home batteries.

~5m

Australians are now more likely to consider buying an EV.

Frequently asked questions

Why are upfront costs a barrier to home electrification?

Electric appliances, solar panels and batteries can require a significant upfront investment. Whilst a household can save money on energy bills over time, the initial cost can be difficult to afford, particularly for households with limited savings or access to finance.

Who is the electrification finance project designed to help?

The project is considering finance options for groups which may include low-income homeowners, first-home buyers, young families, retirees, apartment owners, renters, landlords, owners corporations and people with self-employed or non-standard incomes.

Is Rewiring Australia's finance project offering loans now?

No. The nine-month project is focused on researching and developing potential scalable finance models. Any future pilot or finance products would be a separate phase.

What will the Rewiring Australia and NAB project do?

The project will map existing finance options, conduct consumer research, engage with key stakeholders and develop potential pilot schemes. It aims to establish the evidence, legal framework and operational blueprint needed for future implementation.

Rewiring Australia is a non-profit organisation dedicated to representing the people, households and communities in the energy system. We empirically demonstrate and communicate the cost savings, emissions reductions, and energy system benefits of electrification.
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Rewiring Australia acknowledges the Traditional Owners of the lands on which we live, meet and work and we pay our respects to Elders past and present.

Rewiring Australia is a member of Climate Action Network Australia.

Rewiring Australia is an Australian charity registered with the ACNC with Deductible Gift Recipient status (ABN 18 664 239 196). All donations over $2 are tax deductible.

Electrification Finance Project