Solar & EV Loan Demand Remains Elevated – NAB
(6 December 2022 – Australia) The rising cost of funding has not dented business credit demand for solar panels and electric vehicles (EV), as the energy price crisis and other variables have promoted their use case according to NAB.
NAB’s head of business and private banking Andrew Irvine confirms the bank is registering strong demand for finance as CFOs and treasurers seek to transition to a lower carbon environment and cut costs. NAB’s lending to businesses for “plug-in” hybrid vehicles and EVs surged 900 percent since 2020, while financing to companies for solar assets was up 600 percent since 2020, albeit from a low base.
NAB is matching a concerted push by Big Four and non-Big Four rivals into green loans which typically offer lower interest rates than those of more traditional finance. The bank is launching an agribusiness green loan, following a pilot, which facilitates finance for businesses seeking to invest in eligible on-farm practices and technologies to cut emissions or build climate resilience. NAB also offers finance for so-called green equipment and has a specific loan option for companies buying electric vehicles.
A report by Bain & Co found that Australian companies lagged overseas rivals in recognising that becoming more sustainable could fuel growth, rather than being merely classed as a recognised business risk.
“Energy and energy pricing has in many ways made the business case for transition a better one. The economics of putting solar panels on a business has changed fundamentally in the last six to nine months” Mr Irvine commented.
“All the incentives in addition to the pre-existing instant asset write-off program, all these help making the cost of these investments more tenable for business owners and businesses and we are going to continue to see traction in this area” Mr Irvine added.