What would National's solar scheme offer that we can't currently get?

National is promising to offer New Zealand households another way to put solar power on their homes, if it's re-elected.

It planned to introduce a Home Energy Fund offering low-interest, long-term loans that are repaid through rates so households can invest in solar, batteries, insulation and heat pumps, without upfront costs.

The party would also allow people to install solar without the need for council consent.

Most New Zealanders putting solar power systems on their roof at the moment are doing it with green loans from the banks.

All the major banks offer favourable loan terms for things like solar power systems and electric vehicles. They either charge no interest or 1 percent for three or five-year terms.

So what's National proposing that's any different, and why do we need it?

What's the problem with bank loans?

Prime Minister Christopher Luxon said on Thursday that the banks had quite a high rejection rate and were not offering loans at the scale required.

People generally need to have a home loan with a bank to qualify for a green loan. This has been a problem for people such as retirees.

Without a loan, homeowners have to come up with the money to pay for the system, which can be a hurdle.

What's the difference with the planned scheme?

The scheme National is proposing would secure the loan against the house, and it would be paid back via rates over a much longer period of time.

A spokesperson said 10 years was a possible starting point but there would be no penalties for early repayment.

"LGNZ have previously said loans through their Ratepayers Assistance Scheme - which inspires National's Home Energy Fund -could be structured over 20-30 years. The exact rate and term will be confirmed at the time when the fund is set up."

It is intended that savings on power bills would outweigh the repayment amount. There would be the option of deferral for people who struggled to pay.

The interest rate would be higher. While you're able to get very low rates from the banks at present, the spokesperson said the scheme would be about 2 percent below floating rates. At the moment, those are about 5.8 percent.

If a house was sold, the loan could transfer to a new purchaser or be repaid.

It's been estimated that most systems pay themselves off with power savings in about seven years.

People would still need 20 percent equity in their homes, as with bank loans.

What about tenants?

People who rent properties have generally missed out on solar power so far because there is limited incentive for them to pay to put a solar power system on a property owned by someone else, and the upfront cost has been too high to make it worthwhile for most investors.

National said its scheme would be open to landlords. "We expect many to take it up because the cost sits with the property and can be repaid over time, so more rentals get solar and batteries. And more household generation eases pressure on the grid at peak times, which helps hold down prices for everyone, including renters."

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