South Australia’s plan to match its nation-leading rooftop solar uptake with battery storage will soon be up and running, after peer-to-peer lender RateSetter was named as the exclusive administrator of the Liberal government’s $100 million Home Battery Scheme.
The deal, announced on Friday, puts the UK-based RateSetter in charge of up to $100 million in Clean Energy Finance Corporation funding to cover any upfront battery installation costs that are not met by SA government subsidies.
The CEFC finance will be delivered through a new South Australia-specific renewable energy lending market, set up to specifically for the Home Battery Scheme.
That scheme, promised in the lead-up to the recent state election, aims to give 40,000 South Australian solar households access to up to $6000 in subsidies towards the cost adding battery storage.
The subsidy will vary depending on the size of the battery, based on a rate of $500 per kilowatt-hour (kWh) for regular households, and $600/kWh for energy concession holders.
And last month it was revealed that a $100 million contribution from the CEFC would give participating households the option – subject to credit approval – to finance the unsubsidised portion of the battery system, as well as more rooftop solar, if required.
At the same time RateSetter will enable South Australian retail investors – as well as institutional investors such as banks, credit unions and superannuation funds – to also invest in the program through the new lending market.
The deal is a major coup for the UK-headquartered RateSetter, which is doing a roaring trade in home energy technology loans, driven largely by demand for solar and battery storage.
“With a 237 per cent monthly increase in the number of renewable energy loans financed between January and August 2018, this is one of RateSetter’s fastest growing business areas and firmly positions the business as a market leader for renewable energy finance,” CEO Daniel Foggo said in comments on Friday.
“Loans are currently funded from over 12,000 everyday Australian investors on RateSetter’s platform, as well as several institutional investors including the CEFC, fixed income funds, SMSFs, banks and credit unions.
“For investors, we are providing a simple way to invest directly in loans for renewable energy products, while allowing them to earn attractive, stable returns,” Foggo said.
“The Government of South Australia’s subsidy, CEFC’s cost-competitive finance and RateSetter’s streamlined customer offering will together provide a simple and fast way for homeowners to reduce their power bills and contribute to a reduced carbon footprint,” he added.
State energy minister Dan van Holst Pellekaan said the battery scheme would deliver multiple benefits, by reducing the cost of energy, improving the resilience of South Australia’s grid, and lowering carbon emissions.
“The Marshall government’s home battery scheme puts South Australia way out in front on making batteries accessible for households, delivering cheaper and more reliable power for all,” van Holst Pellekaan said.
“RateSetter’s plans to bring in even more investment from retail and institutional investors will play a vital role in reducing the upfront cost of batteries.”
RateSetter and the CEFC have collaborated before, starting with the CEFC’s May 2017 $20 million commitment to kick-start the lender’s Green Loan Marketplace for Australian borrowers looking to buy or install energy efficient and solar products.
Foggo said the company looked forward to progressing “similar opportunities” with the CEFC and other state governments, “so we can continue to open up simple, fast and affordable finance for renewable energy products and improve energy security for all Australians.”
Sophie is editor of One Step Off The Grid and deputy editor of its sister site, Renew Economy. Sophie has been writing about clean energy for more than a decade.
