Home retrofits result in multiple benefits to governments, people, and communities. They provide a low-cost mechanism to achieve Australia’s emissions reduction targets; create homes that are affordable to run, healthy, safe and climate resilient; help reduce cost of living pressures; create jobs; and improve energy security and reliability.

With roughly 8 million homes, including approximately 1.8 million low-income households, requiring some level of retrofit before 2035 to achieve emissions reduction and climate-resilience goals, the task requires significant government and market support.

This report presents funding and finance options to support the roll out of rapid and substantial energy performance (thermal efficiency, efficient electric appliances, and on-site renewables) and climate-resilience retrofits, to low-income housing (Public housing, community housing, First Nations community-controlled housing, private rental properties, and owner-occupier homes).

There is consensus that government supported funding and financing of low-income housing, with rapid rollout to all public, community housing, and First Nations community-controlled housing should be prioritised. Direct government support would build economies of scale and market capacity, reducing the costs for all housing retrofits, while reducing poverty and inequality.

Seven funding and finance solutions are recommended, including:

• Establishing a Special Purpose Funding Vehicle, with an initial federal government injection of $2 billion, topped up by other sources, to invest in deep and rapid energy performance and climate-resilience retrofit programs, tailored across low-income housing tenure types.
• Establish and fund a form of Environmental Upgrade Finance (EUF) program to be delivered by local councils to retrofit owner-occupier and private rental retrofits.