New Zealand’s clean tech sector is undergoing an interesting transformation. This transformation is twofold - not only are solar and other clean technologies rapidly growing, but all major financial institutions in the country are now offering low-interest loans for the same.
After Westpac, ASB, and ANZ, Bank of New Zealand (BNZ) is now offering a low-interest loan for customers investing in solar or other energy efficiency upgrades. Let’s look at BNZ’s offering in some more detail.
BNZ Green Home Loan Top-Up
BNZ’s green loan allows customers to borrow up to $80,000 at an alluring 1% interest rate. The loan has a fixed term of 3 years. As the name suggests, it is a home loan top-up, meaning you need to have a home loan with BNZ. Alternatively, you can shift your existing home loan from another bank to BNZ.
After the 3-year fixed term, the bank’s floating rate will be applied. However, customers have the option to refix the loan. While $80,000 is the maximum loan amount, the minimum is set at $5,000.
Borrowers of the green home loan top-up may be subject to an establishment fee of $150 if they are a new customer and $100 if they are an existing customer.
Eligibility Criteria for BNZ Green Home Loan Top-Up
The following energy efficiency upgrades are eligible for BNZ’s green loan:
1. Renewable energy upgrades:
- Solar Panels, batteries, and inverters.
2. Heating and Insulation:
- Heat pumps: fixed or ducted heat pump systems.
- Water heating: heat pump water heaters or solar water heaters.
- Insulation: ceiling, wall, or underfloor insulation.
- Window glazing: double, secondary or triple glazing.
- Ventilation: positive or balanced pressure ventilation systems
3. Water tanks
- Rainwater tanks - home water tanks (including related parts like pumps, connections, and filters).
4. Transport options
- EVs or plug-in hybrids
- Electric chargers
- Electric bikes
For the loan to be approved, the applicant must provide proof that the loan will cover the cost of the purchase. Customers can do this by submitting quotations received by the provider/seller of the energy efficiency upgrade.
Any quote for solar panels and/or batteries should be provided by an installer who is a member of the Sustainable Energy Association of New Zealand (SEANZ). My Solar Quotes only provides quotes from SEANZ members. Similarly, customers applying for a loan for EVs and PHEVs should submit a purchase agreement from a registered motor vehicle trader.
For other mentioned upgrades too, applicants will need a quote for supply and installation from a registered business.
An important thing to note here is that customers can apply for a loan for the green loan for a combination of upgrades. For example, the loan can be borrowed for a solar power system and an electric vehicle together.
The borrower can not only enjoy a much lower interest rate (for context, a regular car loan interest rate can be anywhere between 7-15%), but also power their EV using the solar power system, saving a large amount of money on both power and fuel.
How Much Money Does BNZ’s Green Home Loan Top-Up Save?
To get a clearer idea of how much more beneficial a soft-loan can be, let us compare BNZ’s green loan with a regular loan. Let us assume that a customer is planning on buying a solar power system and an electric vehicle.
A typical, single-family house with an EV may need about 5-8 kW of solar power. For the purpose of our calculation, let’s consider a 6 kW system. This system will cost about $15,000. In addition, a typical EV may cost well above $60,000. All in all, let us assume that a customer borrows the entire available $80,000 under BNZ’s green loan. And finally, to compare, let us consider a regular interest rate of 7% on this $80,000.
When a customer borrows $80,000 at 7% interest, with a comparable 3-year term, the total interest they will pay over time is $8,976.
On the other hand, the same $80,000 borrowed from BNZ at 1% for 3 years will cost an interest amount of $1,239. The difference between both examples comes down to an impressive $7,739.
How to Apply to the BNZ Green Home Top-Up Loan
Applying for BNZ’s green loan is quite straightforward. The existing home loan customers of BNZ can apply for the top-up via BNZ’s website or mobile app.
Customers of another bank will need to move their home loan to BNZ.
Comparing All the Green Loans in New Zealand
At this point, all the major banks in New Zealand are offering their own low-interest loan for clean technologies. There are slight differences in all the loans, but the key aspects of all the loans, such as eligible upgrades, interest rate, and other criteria - are more or less similar.
Here is a chart that outlines all the currently available green loans in the country, to make it easier to choose the option that’s right for you.
| BNZ | ANZ | ANZ | ASB | Westpac | |
| Loan Name | Green Home Loan Top-Up | Green Business Loan | Good Energy Home Loan | Better Homes Top-Up | Westpac Warm-Up Loan |
| Interest Rate | 1% p.a. | 1% p.a. | 1% p.a. | 1% p.a. | 0% p.a. |
| Maximum Eligible Amount | $80,000 | $3 million | $80,000 | $80,000 | $40,000 |
| Eligible Upgrades | Solar power equipment, heating and insulation equipment, electric mobility, | Renewable energy, energy efficiency, green buildings, sustainable land use, sustainable water, and wastewater | Solar power equipment, electric mobility, heat pumps, insulation, glazing, ventilation, and water heating | Solar power equipment, EV and EV chargers, home insulation, heating/cooling, moisture reduction, and water heating | Solar power equipment, EV and EV chargers, home insulation, heating/cooling, glazing, ventilation, and wood burners |
| Eligible customers | Homeowners | Business owners | Homeowners | Homeowners | Homeowners |
| Term | 3 years | 5 years | 3 years | 3 years | 5 years |
Final Thoughts
Buying a solar power system, or any energy efficiency upgrade for that matter was significantly more difficult just a decade ago. Particularly, the prices of solar panels and batteries were quite high - high enough to discourage buyers who were already on the fence about it.
In a surprisingly short period, the prices of solar and other such technologies have plummeted. And to add to that, all the major banks in New Zealand are now offering low-interest loans for purchasing sustainable upgrades. Therefore, the benefits of solar power and similar tech have become far more accessible to Kiwis in just the past few years.
With some calculation, it is clear that such loans can save thousands of dollars compared to regular loans with higher interest rates. As such, it would not be an exaggeration to call this a golden time to invest in energy independence or energy efficiency.
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