ACT Labor will offer interest-free loans to make Canberra households more sustainable if re-elected at October’s territory election.
Labor has announced a $150 million election commitment to provide the capital’s households with interest-free loans between $2,000 and $15,000 to help cover the upfront costs of installing rooftop solar panels, household battery storage and hot water heat pumps.
If re-elected, Labor said it would offer the loans from mid-next year.
ACT Labor leader Andrew Barr said the policy could see average households cut more than $10,000 from their bills over the next decade.
“Each of these technologies will produce savings for a household in terms of their energy costs and significantly reduce greenhouse gas emissions,” the Chief Minister said.
“A combination of all of them can deliver savings for households of approaching $2,000 a year, depending of course on how much energy is consumed and the size of the household.
“This is particularly targeted at a cohort of Canberra households that have indicated that if they had the available upfront cash to be able to install these sorts of technologies they would, and this program will allow that to happen.”
Under the scheme, Labor plans to accredit a number of providers and allow Canberrans to choose the installer, according to the type of product they require.
The government would then provide the upfront capital, in the form of a zero interest loan, for the purchase and installation.
Customers would then repay the loan over a 10-year period.
“But they would be saving more in the lower energy costs than the cost of repaying the loan, so households are better off,” Mr Barr said.
“The cost of the initiative is effectively the 10-year government bond rate, so to government it will cost around 1.6 per cent.
“So, when fully subscribed, just a little under $2.5 million a year in terms of the public cost to taxpayers broadly, and then they’ll be the administration element to manage the loan book.”
Loans would also be good for Canberra jobs: Labor
According to ACT Labor, the move is forecast to create and protect hundreds of local jobs over the next decade.
“The program will not only create new jobs, it will reduce household cost of living, and it supports the take up of a range of new technologies that will lead to lower emissions,” Mr Barr said.
The ACT is already powered by 100 per cent renewable electricity, and Renew Economy founder and editor Giles Parkinson says the policy is the next step in de-carbonising Canberra.
Mr Parkinson said the shift away from gas and fuel for heating and transport meant the amount of electricity required to run the capital would increase.
“So you’re going to need more wind and solar production and [one way of doing that] is to encourage homes and businesses to install it themselves,” he said.
Mr Parkinson said an uptake of household batteries would also help the grid by storing power to be used during peak periods.
“One of the things we’re going to see in the ACT and across Australia is that a huge amount of our future power needs are going to come from … distributed energy — things like rooftop solar, heat pumps, battery storage and electric vehicles.” he said.
“It will be a really important part of the equation and something that’s got to happen, not just in the households who care rich enough to go out and buy it now, it has got to happen in every part of the community.
“It’s a really exciting transition.”
The election commitment was also welcomed by the Climate Council.
“If introduced, this commitment would serve as a win-win-win for the ACT, by setting up new jobs for the future, lowering power bills, whilst also reducing pollution,” Climate Council chief executive Amanda McKenzie said.
Labor encouraging families to go into debt: Liberals
Energy policy expert Tony Wood from the Grattan Institute criticised ACT Labor’s policy, saying it did not address the financial barriers keeping low-income home owners out of the market.
“I think they’ve got to be applying the financial support in a targeted way that actually addresses the barrier that exists today,” he said.
“I don’t think generally subsidising people out of government money is necessarily a good idea.”
Canberra Liberals leader Alistair Coe said Labor’s scheme could put many Canberra families into debt.
“It’s a proposal that I think is potentially very irresponsible,” Opposition Leader Alistair Coe said.
“It’s a proposal that is designed to get people who would otherwise not be in the position to take up a loan to go into debt.”
Mr Coe said the real issue in the ACT was the rising cost of living.
“When people are paying over $500 a week for rent, they’re paying top dollar to register their car, they’re paying top dollar for other fees and charges, the ACT Government’s only solution is to put these families into debt,” he said.