National is promising New Zealand households a new way to pay for rooftop solar, batteries, insulation and heat pumps, with a proposed Home Energy Fund that would spread repayments through council rates rather than relying only on traditional bank lending.
The proposal, announced ahead of the 2026 election, is designed to help homeowners who want to cut power bills but cannot easily access the green loans currently offered by major banks. Prime Minister Christopher Luxon said banks have a high rejection rate and are not offering loans at the scale National believes is needed to support wider home energy upgrades.
At the moment, many New Zealanders who install rooftop solar use green loans from banks. These can be attractive because major lenders often offer 0% or 1% interest for three to five years. But those products usually require borrowers to already have a home loan with the same bank, which can exclude mortgage-free homeowners, some retirees and others who do not meet standard lending criteria.
How National’s Home Energy Fund would work
Under National’s plan, eligible households could borrow money for approved home energy upgrades without paying the full installation cost upfront. The loan would be secured against the property and repaid through local council rates over a longer period.
A 10-year repayment term has been suggested as a possible starting point, although the final term has not been confirmed. National has also pointed to earlier comments from Local Government New Zealand that similar ratepayer assistance-style loans could potentially run for 20 to 30 years. The party says there would be no penalty for early repayment.
If the property was sold before the loan was fully repaid, the outstanding balance could either transfer to the new buyer or be paid off at settlement. That property-linked structure is one of the biggest differences from current bank green loans, which are tied more directly to the borrower.
National has also said households struggling with repayments could have the option to defer payments, though the detailed rules would only be confirmed if the fund is formally established.
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Interest rate, equity rules and payback time
The Home Energy Fund would not necessarily be the cheapest option for every household. Current bank green loans may still be cheaper for borrowers who qualify, especially where rates are 0% or 1%.
National’s proposed fund would be priced at about two percentage points below floating mortgage rates. With floating rates around 5.8% at the time of the announcement, that would suggest a rate near 3.8%, although the final rate would depend on market conditions when the scheme is set up.
Households would still need around 20% equity in their homes, similar to existing bank requirements. That means the scheme could widen access, but it would not be available to every household.
The financial case would depend on whether power bill savings outweigh repayments. Residential solar systems are often estimated to pay for themselves through electricity savings in about seven years, but the real result depends on system size, battery costs, household electricity use, export rates and installation quality.
What it could mean for renters and landlords
Renters have generally missed out on rooftop solar because they do not own the property and have little incentive to pay for upgrades to someone else’s home. Landlords, meanwhile, may hesitate to pay the upfront cost when tenants receive much of the direct power-bill benefit.
National says landlords would be able to use the Home Energy Fund. The party argues that because the cost would sit with the property and be repaid over time, more rental homes could install solar panels and batteries. It also says more household generation could reduce pressure on the electricity grid during peak periods, helping hold down prices for everyone, including renters.
The proposal lands as household energy use becomes a bigger part of New Zealand’s cost-of-living debate. A related analysis on New Zealand’s potential savings from shifting power use off-peak shows why timing, demand and grid pressure are becoming increasingly important for future power bills.
Council consent
National has also said it would allow people to install solar without needing council consent. That could reduce paperwork and delays for households, although electrical safety, installer quality and product standards would still remain important.
The proposal is not yet an active government programme. The final interest rate, repayment term, eligibility rules, council role and delivery model would only be confirmed if the Home Energy Fund is set up after the election.
For homeowners who already qualify for a 0% or 1% bank green loan, existing bank finance may still be the cheaper route. But for people rejected by banks, mortgage-free homeowners, some retirees and landlords considering upgrades across rental properties, National’s scheme could offer a financing pathway that is not widely available today.
More details on the proposal were reported by RNZ’s personal finance coverage.
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