The Household Energy Upgrades Fund (HEUF) is a $1 billion federal initiative managed by the Clean Energy Finance Corporation (CEFC) that provides discounted, low-interest loans to Australian households for energy-efficient upgrades. Launched in December 2023, the fund aims to help over 110,000 households reduce their energy bills, improve home comfort, and lower carbon emissions. These loans are not offered directly by the CEFC but through a network of participating lenders such as Plenti, Westpac, ING Australia, Bank Australia, Commonwealth Bank, Brighte, and Plico.
Households utilising HEUF-backed finance have seen average electricity bill savings of $1,700 to $2,300 annually, with energy costs reduced by 80% to 85% in upgraded homes, according to CSIRO analysis. Additionally, borrowers have saved around $570 on average in HEUF loan interest in the first year alone. This guide details how you can access these federal loans in 2026 to make your home more energy-efficient and reduce your ongoing costs.
What is Australia’s Household Energy Upgrades Fund (HEUF)?
The Household Energy Upgrades Fund is a cornerstone of the Australian Government’s strategy to accelerate the nation’s transition to a cleaner energy future and achieve net-zero emissions by 2050. With $1 billion in capital, the CEFC “crowds in” private investment from financial institutions to offer households more affordable finance for approved energy upgrades. The fund specifically targets existing dwellings that may lack optimal energy efficiency, aiming to retrofit greener, more sustainable homes across Australia.
The HEUF has helped households save an average of $1,700 to $2,300 a year in electricity bills and reduced energy costs by 80% to 85% in upgraded homes.
Who is Eligible for HEUF Loans?
Eligibility for HEUF-backed loans is determined by the participating lenders, but general criteria include:
- Being an Australian citizen or permanent resident over 18 years old.
- Owning (or purchasing) your home, with some lenders applying a property value cap (e.g., Plenti specifies a property value not exceeding $2.5 million).
- Having a clear credit history.
- Being employed more than 25 hours a week, a self-funded retiree, or receiving a government pension.
- The upgrades must be for existing homes or knock-down-and-rebuild projects where there’s a substantial improvement in energy performance. Rental property owners and strata properties may also be eligible.
It is crucial to consult directly with a participating lender for precise eligibility requirements for their specific HEUF-supported products.
Covered Upgrades: What Can You Finance?
The HEUF supports a broad range of energy-efficient upgrades aimed at reducing household emissions and improving comfort. Eligible technologies and improvements may include:
- Solar PV Systems and Batteries: Installing new solar panels or adding battery storage to an existing system. Note that solar-only financing options may be considered in specific cases (e.g., renters, low-income), but generally, HEUF finance for solar requires the installation of other clean energy or energy efficiency technologies.
- Energy-Efficient Hot Water Systems: This primarily includes heat pump hot water systems, which can significantly reduce running costs compared to traditional electric or gas systems.
- High-Efficiency Heating and Cooling: Upgrades such as reverse-cycle air conditioners, double-glazed windows, insulation (ceiling, wall, floor), and ceiling fans.
- Energy-Efficient Appliances: Modern appliances with high energy star ratings, including induction cooktops and efficient pool pumps.
- Electric Vehicle (EV) Chargers: Installation of home EV charging infrastructure.
- Energy Monitoring Systems: Devices that help track and manage household energy consumption.
To ensure eligibility, products, installations, and technologies must meet specific requirements, and installers must be accredited (e.g., NETCC for solar/battery, SAA certified for installers).
Typical Upgrade Costs and Potential Savings (2026)
Here’s an overview of average installed costs for common upgrades in Australia in 2026, before HEUF loan discounts and other rebates are applied:
| Upgrade Type | Typical Installed Cost (AUD) | Annual Energy Savings (Approx.) |
|---|---|---|
| 6.6kW Solar System (Standard) | $5,000 – $8,500 | $1,500 – $2,500+ |
| 10kWh Home Battery (e.g., Sungrow, BYD) | $8,000 – $13,500 | $600 – $1,200 (with solar) |
| Heat Pump Hot Water System | $4,500 – $7,000 | $300 – $600 (vs. electric) |
| Reverse-Cycle Air Conditioner (High-efficiency) | $1,500 – $4,000 | $200 – $500 |
| Ceiling Insulation (R4.0) | $1,500 – $3,000 | $200 – $400 |
| EV Charger (Basic) | $1,000 – $2,500 | N/A (fuel savings are separate) |
Note: These are average costs and can vary significantly based on brand, complexity of installation, and location.
For more detailed information on solar costs, refer to our guide: 6.6kW Solar & 10kWh Battery Cost Australia 2026: Full Payback Analysis.
Loan Terms and Application Process
The CEFC works with partner lenders to offer tailored “green finance” products. While specific interest rates and terms vary by lender, HEUF-supported loans are designed to be low-cost and competitive. For instance, Plenti offers rate discounts of up to 3% p.a. off their standard Green Loan rates, with loan amounts from $2,000 to $50,000 over 3 to 15 years. Westpac offers a Sustainable Upgrades Home Loan up to $50,000 at a 4.49% variable interest rate over 10 years for eligible customers. Other participating lenders like CommBank and Brighte also offer competitive green loan options.
The application process typically involves these steps:
- Decide on Upgrades: Identify the energy-efficient improvements you wish to make. Consider a Home Energy Rating assessor for tailored advice.
- Contact a Participating Lender: Speak to one of the CEFC’s co-financiers (e.g., Plenti, Westpac, ING, CommBank, Brighte, Plico, Bank Australia) to discuss their HEUF-supported products, eligibility, and eligible upgrades.
- Obtain Quotes from Accredited Installers: Get detailed quotes for your chosen upgrades from approved vendors or contractors. Your chosen installer may initiate the loan application process with the lender.
- Apply for the Loan: Submit your application with the required documentation, including proof of identity, income, and quotes for the upgrades.
- Loan Approval and Installation: Once approved, the loan amount will be disbursed, and you can proceed with the installation.
- Repay the Loan: Repayments are made in manageable instalments, often offset by the energy bill savings.
Combining HEUF with State and Federal Rebates: Maximising Your Savings
The HEUF loans can often be stacked with existing state and federal rebates, significantly reducing your out-of-pocket expenses.
- Federal Small-scale Technology Certificates (STCs): This national scheme provides an upfront discount on solar panel installations. In 2026, a 6.6kW system in most states receives an STC discount of approximately $1,600 to $2,000.
- Federal Battery Rebate (Cheaper Home Batteries): Introduced in July 2025, this rebate provides an upfront discount on eligible home batteries, currently around $252 per usable kWh, up to 14kWh, equating to approximately $3,528 off a standard 14 kWh home battery. This rebate is not means-tested and can be combined with state incentives.
- State-Specific Rebates:
- Victoria: The Solar Homes Program offers rebates of up to $1,400 for solar panels and $1,400 for hot water systems, along with interest-free loan options. The Victorian Energy Upgrades (VEU) program also provides point-of-sale discounts on insulation, heat pumps, and other efficient appliances.
- New South Wales: The Energy Savings Scheme (ESS) provides rebates for heat pump hot water systems (e.g., up to $640 when replacing an electric storage tank) and other energy efficiency upgrades. The Peak Demand Reduction Scheme (PDRS) offers VPP incentives, with up to 6 years of incentives upfront for connecting a battery to a VPP.
- South Australia: The Retailer Energy Productivity Scheme (REPS) offers incentives for energy efficiency, and VPP incentives are also available.
- Queensland: Federal STCs apply, and Queensland’s Business and Residential Energy Saving schemes may offer additional rebates up to $1,000 for high-efficiency upgrades.
- Western Australia: Synergy customers can receive up to $1,300 for a 10kWh battery, stackable with the federal rebate, with VPP participation required.
- ACT: The Sustainable Household Scheme offers low-interest loans up to $15,000 for various upgrades, including EV chargers and insulation.
Combining a HEUF low-interest loan with these rebates can significantly reduce the upfront cost burden. For example, a Melbourne homeowner upgrading to solar, a heat pump hot water system, and insulation could reduce upfront costs by $3,000–$6,000 in 2026 by combining Victorian and federal rebates.
Consider exploring guides like Maximise Your Home Battery Savings: Earn $1,000+ Annually with a VPP in 2026 to see how VPP participation can further enhance your savings, especially with additional rate discounts offered by some HEUF lenders for VPP sign-ups.
Example Savings: A Typical Upgrade Scenario
Imagine a Sydney homeowner, currently on an average electricity plan, decides to install a 6.6kW solar system with a 10kWh battery and replace their old electric hot water system with a Sanden Eco Plus heat pump.
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Initial Costs (approx. before HEUF/rebates):
- 6.6kW Solar System (mid-range): $6,000
- 10kWh Battery (e.g., Sungrow SBR100): $9,000
- Sanden Eco Plus Heat Pump (installed): $6,000
- Total Upfront: $21,000
-
Applying Rebates:
- Federal STC for 6.6kW Solar: -$2,000 (approx. Sydney)
- Federal Battery Rebate (for 10kWh): -$2,520 (approx. $252/kWh)
- NSW ESS Heat Pump Rebate: -$640 (approx.)
- Total Rebates: -$5,160
- Net Cost (after rebates): $15,840
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Financing with HEUF Loan:
- Assume a $15,000 HEUF-backed loan (e.g., Plenti Green Loan with 2% p.a. discount) over 7 years. The discounted interest rate could be significantly lower than standard personal loans.
- Monthly Repayments: Approximately $190-$210 per month (depending on exact rate).
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Estimated Annual Savings:
- Solar savings: $2,000 (reducing grid consumption)
- Battery savings: $800 (optimising solar use, avoiding peak rates)
- Heat pump savings: $400 (compared to electric storage)
- Total Annual Savings: $3,200
In this scenario, the annual energy savings of $3,200 could largely offset the loan repayments, making the upgrades cash-flow positive or neutral from the outset, while significantly increasing the home’s value and reducing its environmental footprint.
Bottom Line
Australia’s Household Energy Upgrades Fund in 2026 presents a substantial opportunity for homeowners to invest in energy efficiency with the support of low-interest federal loans. By leveraging the $1 billion fund through participating lenders like Plenti, Westpac, and CommBank, you can finance crucial upgrades such as solar panels, home batteries, heat pump hot water systems, and insulation. These initiatives are not just about reducing your carbon footprint; they offer tangible, immediate financial relief, with households reporting annual savings of up to $2,300 on electricity bills and significant interest rate reductions.
The key is to understand the eligible upgrades, compare offers from the various HEUF-backed lenders, and strategically combine these federal loans with available state and federal rebates (like STCs and the Federal Battery Rebate) to maximise your overall savings. Don’t delay, as some rebate values, such as STCs, decrease annually. Engage with accredited installers and your chosen lender to develop a comprehensive plan that suits your home and budget, making 2026 the year you unlock substantial energy savings.