Costs, Price Factors and 2026 Rebates
Home Energy Upgrades Fund loans for heat pumps and air conditioning: how the CEFC green loans work
How the $1 billion Household Energy Upgrades Fund finances heat pumps and air conditioners through partner lenders, what to compare and how it differs from interest-free plans.
The Australian Government's Household Energy Upgrades Fund (HEUF) is a $1 billion fund managed by the Clean Energy Finance Corporation (CEFC) that helps households pay for upgrades such as heat pumps, air conditioners, solar hot water, insulation and batteries through discounted loans and plans from partner lenders. The CEFC does not lend to households directly: you apply to one of the participating banks or finance providers, which set their own rates, fees and eligibility. A discounted green loan can make a heat pump or reverse cycle upgrade more affordable, but it is still credit, so compare the total cost against paying cash, a mortgage redraw or a retailer's interest-free plan. This guide is part of the installation cost overview.
What the fund finances
According to the CEFC, eligible technologies are aimed at existing homes and include:
- solar PV systems, batteries and solar hot water;
- double-glazed windows, insulation, air conditioners, ceiling fans and heat pumps;
- EV chargers, home energy monitoring, pool pumps and induction cooktops.
Each lender decides which products and installers it accepts and may require an installer from an approved list or proof of the product's efficiency.
Participating lenders and products (as listed by the CEFC in October 2026)
| Lender or provider | Product type listed by the CEFC |
|---|---|
| Brighte | HEUF discounted green loan (personal loan) |
| CommBank | Home Energy Upgrades (personal loan) |
| ING | Green Upgrade Loan (mortgage sub-account) |
| Plenti | HEUF discounted green loan (personal loan) |
| Plico Finance | Subscription plan (WA, NSW and ACT) |
| Westpac | Sustainable Upgrades Home Loan (mortgage sub-account) |
| Zelora | Subscription plan (Qld, Vic, SA, ACT and NSW; financed from the CEFC general portfolio) |
| Bank Australia | Clean Energy Home Loan (green mortgage); the CEFC notes its discount is fully utilised but the loan remains available |
This list is structural information from the CEFC's fund page and can change. We do not compare or rank these lenders, and the table says nothing about their rates. Check each lender's current terms directly.
Loan types compared
| Type | How it works | Good for | Watch out for |
|---|---|---|---|
| Discounted green personal loan | Unsecured loan over a fixed term, often with a discounted rate for eligible products | Households without home equity or who want a fixed end date | Establishment fees; rate after any introductory period |
| Mortgage sub-account or green home loan | Borrow against your home, sometimes at a discounted rate | Lower rate | Long terms can make total interest larger; your home is security |
| Subscription plan | Regular payments for the system over a term, sometimes including service | Spreading cost with bundled maintenance | Who owns the equipment, exit costs, total payments |
| Retailer interest-free plan (outside HEUF) | Pay over months with no interest but fees | Short terms if you can pay on time | Account fees, higher equipment price, late fees, reverting rates |
| Cash or savings | No credit | Lowest total cost | Uses your buffer |
Working out the true cost
Use the upgrade loan calculator to compare options on the same amount.
Illustrative example: a $15,000 ducted reverse cycle upgrade.
| Option (illustrative rates) | Monthly | Total interest | Total repaid |
|---|---|---|---|
| Personal loan, 7.5% p.a., 5 years | about $300.57 | about $3,034 | about $18,034 |
| Same loan, 9.5% p.a., 5 years | about $315.03 | about $3,902 | about $18,902 |
| Mortgage top-up, 6.0% p.a., 25 years | about $96.65 | about $13,994 | about $28,994 |
The mortgage option has the smallest monthly payment but by far the largest total interest, unless you repay it faster. Rates are illustrative, not offers from any lender.
Steps to apply
- Get a written installation quote with model numbers and incentives (STCs, state discounts) already deducted, so you borrow only the net amount.
- Check which participating lenders cover your state and product.
- Compare the comparison rate, fees, term and early repayment conditions.
- Ask whether the lender pays the installer directly and when.
- Read the key facts sheet and credit contract. Credit providers must hold an Australian credit licence and assess whether the loan is suitable for you.
- Keep the loan documents with the installation paperwork.
State and territory finance programs
Some states and territories have run their own zero- or low-interest loan programs for household electrification, such as the ACT's Sustainable Household Scheme (in October 2026 offering eligible homeowners low-interest loans of up to $20,000 at 3% over up to 10 years). Program availability changes; check your state or territory energy department and treat any older article about these schemes with caution until you confirm it is still open.
When to get advice
If you are already stretched by repayments, have other debts or are considering borrowing against your home for an upgrade, talk to a free financial counsellor through the National Debt Helpline before you sign. An upgrade that saves a few hundred dollars a year in running costs does not justify a loan you cannot comfortably repay.
Frequently asked questions
Do I apply to the CEFC for the loan?
No. The CEFC states it does not provide finance to individual borrowers. You apply directly to a participating lender.
Can I use HEUF finance for a split system?
Air conditioners are among the eligible technologies the CEFC lists, but each lender sets product criteria. Ask the lender whether your model and installer qualify.
Should I deduct rebates before borrowing?
Yes, where possible. Borrowing the gross price and waiting for a rebate later means paying interest on money you get back.
Is a subscription plan the same as a loan?
Not exactly. Read who owns the equipment, what happens if you sell the house, and the total of all payments.
Official sources
- Clean Energy Finance Corporation — Household Energy Upgrades Fund and participating lenders
- Moneysmart (ASIC) — comparing personal loans and interest-free deals
- National Debt Helpline — free financial counselling
- energy.gov.au — household rebates and finance
