If you’ve got the money, the best option is to pay for electrification up front and take advantage of the massive bill savings on energy.

With solar, you can lock in the price of electricity for the lifetime of the panels and provide a 10 - 15% return on investment, which is much better than the average deposit rate - and likely to improve as the price of grid electricity goes up. 

Talk to your existing lender to add solar to your mortgage or see what green finance products they offer at lower interest rates. Many banks offer green loans for other low-emissions purchases like heat pumps, hot water heat pumps and EVs, but these are generally short term.

On average, homes currently using gas appliances and petrol vehicles could save around $1,500 per year (and around $4,500 per year if they can get a low interest green loan) if they choose electric equivalents and get their electricity from a combination of rooftop solar, home battery and New Zealand’s highly renewable grid.

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Electric machines are much more efficient than their fossil fuel counterparts and that’s where a lot of the savings come from. For example, an electric car is about four times more efficient at converting energy into motion and, even in cold regions, heat pumps are still more than twice as efficient as most other heating options. Fossil fuels are also single-use, while the materials required for electrification are available and highly recyclable.

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The upfront costs of electric machines are often higher, but our research has proven that New Zealand is one of the first countries to reach what we call the electrification tipping point. This is the point where households and businesses can save money right now if they electrify their appliances and vehicles, even with the upfront costs and interest from loan finance built in. It also means we can significantly reduce our emissions. So when the time comes to repair or replace those fossil fuel machines, we want New Zealanders to make the switch to electric.

One of the main reasons you would buy a petrol car today is because the upfront cost is still lower than an EV. It may seem cheaper, but when you buy a petrol car, you’re also locking yourself into many years of increasingly expensive petrol. The cost of fossil fuels have increased at above the rate of inflation and they are expected to keep increasing, while the price of solar and batteries has continued to declne. 

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Global forecasts show EVs could be the same price as fossil fuel cars by 2026 so the economics keep improving. And it is a similar story with other electric machines.