The Commonwealth Bank of Australia (CBA) has announced a new CommBank Green Loan for new and existing customers with an eligible CommBank home loan or investment home loan.
The green loan will commence with a pilot program in February, with a national rollout scheduled for May 2021.
According to CBA, the loan would enable eligible customers to use the green loan to purchase and install eligible small-scale renewable technology such as solar panels (and invertors, if applicable), battery packs and electric vehicle charging stations at the property used as security for the existing home loans.
The green loan would allow eligible customers to borrow up to $20,000 in renewables at a fixed rate of 0.99 per cent per annum. It can be repaid over 10 years and has no set-up monthly service or early repayment charges, but late payment fees would apply.
Customers eligible to participate in the pilot will receive an invitation directly from CommBank to apply for the loan. The major bank has asked customers to register their interest for the loan.
Commenting on the program, CBA group executive Angus Sullivan said: “As part of our commitment to the responsible global transition to net zero emissions by 2050, we’re supporting our customers access renewable energy through sustainable housing solutions.
“For most customers, they will see their energy bill drop by over $500 per year if they switch to solar, which will offset total repayments of the loan in the long term.”
Eligible small-scale renewables must be installed by an accredited installer certified and trained to ensure systems meet industry best practice standards and all relevant Australian standards (as accredited by the Clean Energy Council), the CBA said.
“We have a responsibility to meet the current needs of our customers and the community while operating sustainably for future generations, and our new CommBank Green Loan will make financing more accessible,” Mr Sullivan said.
“I am extremely excited about this new offering being made available to all eligible customers in May, so I encourage you to register your interest now as we will be announcing additional details closer to launch.”
Clean Energy Council’s chief executive, Kane Thornton, also spoke about the program, saying: “Over 2.7 million Australians have installed solar panels on their homes, and it’s a great way to reduce your power bills and reduce your household’s carbon footprint.
“By choosing a Clean Energy Council-approved solar retailer, you will be working with someone who has signed on to the Solar Retailer Code of Conduct and uses designers and installers who are accredited by the Clean Energy Council.”
The green home loan has followed another green mortgage scheme in 2019, with CBA CEO Matt Comyn having announced a $500 cashback rewards scheme for the bank’s “energy-efficient” mortgage customers who had solar panels installed in their homes.
In addition, in 2019, the bank announced that it would provide $150 million of debt funding to Queensland Airports Ltd (QAL) for the Gold Coast Airport redevelopment. Of the $150 million, $75 million formed a sustainability-linked loan, which provided a margin reduction for QAL should the airport meet targets of lowering “carbon emissions intensity”.
Another lender which is pushing into the renewable energy lending sector is fintech lender Plenti, which secured a second $100 million warehouse facility for renewable energy last year.
In a December quarter trading update, Plenti had attributed its growth to its renewable energy loans, which were found to be up 19 per cent on the prior comparative period.
[Related: CBA reports strong lending growth]
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.