CANBERRA households are set to be running on renewable energy by 2025.
But the latest solar-panel initiative to transition the ACT from fossil fuel gases to net zero emissions could flop for some households should more consumers flood the government cap on its interest-free loan offer.
Should 10,000 eligible homeowners take out the maximum $15,000 loan, ACT Chief Minister Andrew Barr admitted such a move would “exhaust the scheme”.
“I don’t believe each household would seek to borrow the $15,000,” Mr Barr said.
“Our expectations are that there will be at least 10,000 and up to 50,000-60,000 households that may participate.”
The government will be able to offer zero-interest loans – and absorb the repayments on the interest for consumers – from ACT’s rate of borrowing that with a AAA rating is lower than any other state or territory in the nation.
But Mr Barr said the loans will only be backed should it prove there are long-term net financial gains to households that include savings exceeding the principle interest.
The government will be “somewhat at arm’s length” of the lending process that will call on an unnamed financial institution to assess loans and give access to credit.
Homeowners can register online their interest in the scheme from April, but the vast majority of loans will not be issued out until 2022.
Mr Barr expects nearly most of “middle Canberra” to take up the scheme from the 180,000 households in the ACT.
The scheme will enable more Canberrans to benefit from the switch in energy to solar on roofs of homes as part of the $307 million Labor-Greens climate action plan that will be set out in the ACT budget in February.
The $150 million funding for the sustainable household scheme and a further $100 million to deliver a new “large-scale” battery storage to sustain renewable energy will run over five years.
The “Big Canberra Battery” is a distributed network to provide back-up power in case of an overload of the energy grid or demand peaking at a particular time for a “period of hours”.
Mr Barr said the biggest obstacle to homeowners switching to renewable energy has been the up-front financial cost.
“So, this will be a measured roll out,” he said.
“We will work closely with industry to ensure there is the capability to deliver on that scale that we’re looking at.”
Consumers will only have the choice of products and suppliers listed by the government, with only existing energy-efficient providers able to take up the zero emissions energy.
Mr Barr has promised the industry in the ACT will be regulated and not a “free for all” to ensure there will be no inflationary costs in the market.
“It is to assist households to save money to support emissions reductions across the entire community and to have a sustainable program of jobs support and creation,” he said.
The eligibility criteria will be an upper asset threshold through capital value of properties, which will be to get “middle Canberra on board”.
Mr Barr remained hopeful but not adamant that all Canberra householders will make the energy switch.
“It’s not for everyone and I don’t expect it to be,” he said.
“There has been a bunch of people who have adapted early and already made the investments.
“There are others, and I say middle Canberra, that have indicated they would like to do this, but the reason they can’t is the up-front cost of the appliances.
“So we expect that demographic, through the suburbs, middle-income earners and low-to-middle income earners principally who will take this up.”