Energy demand is rising – So are market opportunities

A conversation with Maiclaire Bolton Smith, Tom Coad, and Pete Carroll

Energy is no longer something that hums in the background with reminders showing up in the form of a monthly bill. Solar rooftops, local microgrids, AI-driven demand — it's all reshaping property values, influencing policy, and testing community resilience.  

At Cotality, we’ve seen how renewable choices create ripple effects. In places like Australia, a single rooftop system can lift a home’s value by tens of thousands  of dollars. But the bigger story is how technology — from household upgrades to commercial AI centers — is accelerating demand, cost, and opportunity.  

In this episode, host Maiclaire Bolton Smith sits down with Tom Coad, senior director of banking and finance at Cotality Australia and Pete Carroll, Cotality’s executive vice president of public policy and industry relations, to explore how homeowners can see energy not just as a costbut as a driver of value resilience and  long-term growth.  

In this episode:   

03:16 — How much impact does energy efficiency have on the Australian property market?  

08:52 — When does the homeowner see the benefits of an energy efficient home — during ownership or after sale?

11:30 — How does solar power affect home insurance rates?

14:05 —  Erika Stanley breaks down the latest housing insights in The Sip.  

18:24 — What community-level incentives are currently in place in Australia and the U.S.?  

23:20 —Are there current policies in either country that   incentivize or mandate the use of renewable energy?

27:50 — What is the projected future trajectory for renewable energy to ensure long-term environmental sustainability?

Transcript

Tom Coad:

The value increase of solar panels doesn't mean anything until the homeowner is selling or refinancing or probably no longer in that property. So it is immediately around potential cost savings, but for most people, you'd be looking at five to seven years as a payback period.

Maiclaire Bolton Smith:

Welcome to Beyond the Buildings by Cotality. I am your host Maiclaire Bolton Smith, and I'm just as curious as you are about everything that happens in the property industry. On this podcast, we satisfy our collective curiosity, explore questions from every angle and look beyond the obvious. With every conversation we illuminate what is possible. Solar panels on rooftops, AI powered data centers, community-wide energy initiatives. The renewable energy conversation is no longer just about going green. It's about unlocking value, shaping policy, and preparing for the future where energy demand is surging. At Cotality, we've seen firsthand how new renewable energy technology is influencing property markets In Australia. Adding solar panels can boost a home's value by over $20,000, but the benefits and the challenges go far beyond the residential level. From insurance risk to utility savings from individual choices to national policy, the future of renewables is being written with today's choices and with growing demand from sectors like ai, the stakes are only getting higher. Today we're joined by Tom Code who leads the banking and finance segment at Cotality Australia and Pete Carroll total's executive vice president of public policy and industry relations to explore how energy choices are reshaping real estate infrastructure and climate strategy on both sides of the globe. Tom and Pete, welcome to Beyond the Buildings.

Pete Carroll:

Thanks so much for having me today.

Tom Coad:

Thank you. Very excited to be here.

Erika Stanley:

Before we get too far into this episode, here's a friendly reminder about how to see what's coming up next in the property market. To make it easy, we curate the latest insight and analysis for you online, find us using the handle at Cotality on all our social media channels. But now let's get back to today's show.

Maiclaire Bolton Smith:

Alright, well let's start the discussion by really talking about the influence of energy efficiency on the property market. I know in Australia we just released this report, which has a very witty name. “Watts it Worth?,” we will link that in the show notes as well, but I think the report found that it does have a fairly significant impact about 2.7% on properties, about a little over 20,000 Australian dollars, which is about 13,000 US dollars. So that's not insignificant and an incentive to some for adding these to their property. Was there anything else surprising that came out of this report?

Tom Coad:

Yeah, I think there were two things that really stood out to me. The first was the variability between locations, capital cities. We were seeing generally a two to 3% increase in value and that aligned to that overall national finding. But the regions we were seeing up to almost 7% increases. With the regional Northern Territories seen 6.9% increase in value. That absolutely stood out. The other was the finding of how energy efficiency alongside solar played a part. So that star rating as part of the construction code and the rating system for Australian properties, we saw a 1.6% increase in value linked to a one star increase in efficiency. So I think the two of those, we saw something you can see about a property, a solar panel driving value, but some of the things you can't see, like insulation also playing a part in a value driving factor.

Erika Stanley:

Energy efficient choices like solar panels are measurably influencing property values in both the US and in Australia, but by how much and how long will it take for homeowners to recoup their investment? In Cotality Australia's "Watts it Worth" report experts dive into why sustainable building choices are increasingly important to consider when assessing Australian homes. Find out why sustainability is the inflection point around which Australia's housing market is constructed. Download and read the full report at the link in the show notes.

Maiclaire Bolton Smith  

Increasing the energy efficiency of your home and ultimately lowering your utility costs is really one of the big impacts that does is the knock on that. That does have. Pete, do we see similar here in the US this positive influence of adding solar panels or renewable energy to your property?

Pete Carroll:

Yes. Numerous studies show that solar panels give your home a value bump. It's also called the solar home price premium. Cotality research comports with several other studies, including notably Lawrence Berkley National Laboratory, which is one of the US' most respected scientific laboratories. It shows that these studies show that solar panels boost home sales prices between 2% and 6%. As I mentioned earlier. Within that range, the premium tends to be higher in states or regions with high retail electricity prices as well as solar friendly markets where there's a strong demand for green home features and the premium also tends to be higher for homes that have newer, larger and more efficient solar panel systems installed, which makes sense.

One thing I'd mention on this is that in natural hazard prone regions, the evidence is a mixed bag and very property specific. So on the one hand, solar panels provide what's called a resilience factor where having solar plus storage systems, which is solar panels with a battery, provides a critical source of power during grid outages and studies were showing that's coveted by home buyers and is contributing to that premium. On the other hand, solar panels can increase the level of damage to a property following a natural hazard that can increase restoration and replacement costs and add to the homeowner's insurance premiums that homeowners have to pay. And just one note of caution I'd add is that it's important to draw the distinction between how much solar panels add to the value of the home from how much solar panels save the homeowner and monthly utility costs.

Maiclaire Bolton Smith:

Well, I want to dive into just that right now because I guess we talk a lot about the value it adds, but do the homeowners actually reap these rewards as they are living in the home? I've talked a lot on this podcast about buying this house where we currently live now in southern California. It was one of the things the day we moved in, my husband's like we're putting solar panels on this house, and I went back and forth on they're not cheap. Yes, they may add a value to your home, but for a home where we live, it was $60,000, I think even higher than that to put solar panels on our house with a battery. So it's going to take a long time to actually save that amount of money in my monthly bills for it to actually pay off, especially if I'm not planning on selling this house in the near future. So I kind of want to get into both of those topics right now with the two of you of does it actually, what's the inflection point where the homeowner living in the home starts to see that this is worthwhile other than just the good heart feeling that I'm saving the environment? Tom, why don't we start with you?

Tom Coad:

It's a great question and the value increase doesn't mean anything until the homeowner is selling or refinancing or probably no longer in that property. So it is immediately around potential cost savings In Australia. The cost to get solar does vary by state. It does depend on the rebate scheme. It does depend on where your property is or how big the solar system is, but it would not be surprising for something around 10,000 to 15,000 Australian dollars to install solar panels without a battery at your home at that sort of price. And depending on your usage, everyone's a little bit different. We had a newborn, we ran air conditioning every day for pretty much a year. Our energy bill was $4,000. So you quickly come to a really positive inflection point after a few years with that sort of usage, but for most people you'd be looking at five to seven years as a payback period. What we've seen is lenders come out with fantastic offers and interest rate opportunities for homeowners to install these features on their properties, offering lower interest rates to install solar where the interest rate cost is being covered by your savings from an energy perspective.

Maiclaire Bolton Smith:

Now, Pete, how does that vary here in the US? I gave an example of what life is like here in Southern California. I know it's not like that everywhere else in the country. Yeah. What does it look like? The return period on benefit if you're staying in your home?

Pete Carroll:

I'd agree with Tom. It would appear in the US to be very similar, that the immediate focus is on the cost savings. That's certainly where a lot of the marketing is driven with solar panel installers. And I think the trick is to, or the challenge is that you have a dynamic where solar installers, they have models for showing what the savings for your utility bills can look like, but they're not very robust models, right? They're generalized and the question of what it takes to really accurately forecast what cost savings look like when you do a solar installation, especially if it requires any kind of retrofitting or electrification of the house, can vary quite dramatically. And it's also very much a function of the energy consumption habits of the household themselves. So we'll get into that a little bit more later, unpack that a bit more later. But that's a big factor and is also a big challenge with trying to reach more of a critical mass or inflection point with solar panel adoption.

Maiclaire Bolton Smith:

Yeah. Tom, you said something though that triggered me to want to ask is you said if you sell or if you refinance, what is the benefit to the homeowner with a refinance if they've added solar panels?

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Tom Coad:

So thinking about the value of your property, and if you are refinancing switching banks or switching lenders, they are reassessing the value of your property at that point. So you could be in a better linger rate value ratio position LVR position, and that in some cases can mean even more favorable interest rates, especially if you are kind of moving down. Some of those 10% brackets. Now the premium is not huge. It's one or 2% in those capital cities, maybe up to three, but that sometimes is enough to push you into those slightly lower interest rate brackets.

Maiclaire Bolton Smith:

Gotcha. Okay. No, that makes sense. Pete, I want to go back to you. Something you mentioned was insurance. You kind of alluded to the fact that we were going to go in this direction and it's an important one because how does insurance costs vary depending on if you have solar panels and you've kind of talked about in different regions, they kind of mean different things. My brain instantly goes to the center of the country, which is prone to hailstorms. Hail on solar panels might not be a great idea. How does that vary versus somebody in California or somebody on the east coast where the natural hazards may be different?

Pete Carroll:

It's a very important question. Solar panels can affect the homeowner's insurance premium, no question. So it's an important topic homeowners need to think about before they install 'em. The biggest challenge is that every insurance company handles this differently. Some companies will simply include the panels under their standard policy, maybe with a small bump in the premium, maybe not. Maybe they'll just leave it the way it is. Others will require you to buy a special add-on what's called an endorsement to ensure the solar panels are covered, how the panels are installed. It is also another point how the panels are actually installed directly on the roof of the home or on the ground as technically a separate structure from the main home will also influence that decision. Right. Whether they're require an endorsement, a separate policy rider or not, and whether they put a premium in a worst case scenario, if you live in an area with a lot of natural hazards, a few companies may not want to cover the panels at all or could even decide to drop your policy probably to a lesser extent just due to solar panels, but it really depends on how they view that added risk. Right. Okay. I think that's why being comfortable with as a homeowner, being comfortable with your policy is so important. Right. In our recent from House to home survey we did here at Cotality, we found that comfort was the number one priority for home buyers and insurance, it even top convenience. So clearly understanding and trusting your policy is essential, especially when you're adding on things that are outside of the standard policy.

Erika Stanley:

It is that time again, Cotality just dropped new numbers about what's happening in the housing market. Here's what you need to know. Housing fragility ripples into the wider economy left unchecked. This strain could trigger a housing shock with echoes of the last financial crisis. Only this time the fault line runs through insurance homes across the country are facing an environment they were never built to withstand. When insurance becomes unattainable, lenders are left with fewer qualified borrowers that then weakens demand, which threatens the $29 trillion in wealth created since 2012. But not all states are feeling the pressure equally nor is the current fix a long-term fix. According to Cotality, 12% of today's housing stock has a very high risk of damage from natural disasters without adaptation to the changing environment, that number jumps to 20%. Rebuilding all of these structures would cost $7.2 trillion, a significantly larger cost than the hundreds of billions of dollars it would take to integrate resilience into the property market. To learn more about how resilience can reshape the foundations of property, read our latest article at Cotality.com/Insights. The link is in the show notes and that's the sip. See you next time.

Maiclaire Bolton Smith:

So far everything we've talked about has been at the homeowner individual level, but obviously there are benefits far beyond just the individual level as well. What about looking at the community level? How can this be done potentially? How can policy influence things to potentially do better here? And Pete, why don't we continue starting with you and then we'll move over to Tom.

Pete Carroll:

Sure. So it's absolutely possible to increase the benefits of solar energy at a community level and policymakers have a major role to play to make that happen, right? The key is to move beyond just individual installations and create smart data-driven programs that benefit a wide range of people. The problem here is that not all homes are equal. As this what I was getting to earlier, the biggest challenge is that solar isn't a one size fits all solution. Not only is solar energy dependent on the actual climate in an area, there's less available energy, for example, there's less available energy in Seattle than in Texas. But a homeowner's energy usage is a very personal thing, right? It depends on the age of their home, it's insulation, and really very importantly their daily habits. Among many other factors. Am I going to, if it's on a cold winter evening, am I somebody who keeps the thermostat at 66 Fahrenheit or do I jack it up and it's like the 80 degree Fahrenheit range, right?

And there's many other factors. So just simply installing solar panels without understanding these factors can lead to disappointing savings. So for a community wide program to work, it needs to be able to reliably predict the actual energy savings a family can expect. So a community level solution, I mean, we could really unpack this. What I would say is that we Cotality is working very closely with the UK government. If you don't mind this quick diversion pioneering with UK government for 37 million homes as part of the UK's goal to achieve net zero carbon emissions by 2050. The UK, the government's created a standardized energy model. The companies like Cotality have adapted to accurately predict a home's energy use and how much a solar retrofit will truly save a family. And this requires a lot. This requires detailed inspections, exactly what's going on with the home in its current state. The plan to upgrade those features to make them electrified and energy efficient, and even installing sensors so you can better understand the family's real-time energy use, ensuring the savings are realized after the project's complete. And so that kind of approach ensures that solar projects are only, and very importantly that these projects are only implemented, especially in the us this is an important point. Projects are only implemented when they provide a clear and verified economic benefit for the homeowner.

Maiclaire Bolton Smith:

Interesting. Okay. That was great and thank you for making the reference to the UK as well too. I know that the race to net zero is real over in the UK, and that's something that I know we at Cotality have done some very interesting things in offering some of our insurance clients for that. So Tom, what about in Australia on the community level? Are you seeing any even incentives or anything that would be different or similar to what Pete just talked about here in the US.

Tom Coad:

We've definitely seen the rebate schemes, which I've touched on a couple of times. And by rebate schemes, I mean money that has been set aside by state and federal governments to offset or partially offset the cost of these installations. That has led to a significant uptake in solar. So again, roughly one in three homes across Australia have solar, but it continues to be a really important conversation from a policy perspective and from a regulatory perspective. The national construction code that I talked about considers what the energy efficiency ratings on homes should be. And while solar doesn't by itself make a property more efficient, it is something that helps to then offset the overall energy usage on a property, which then has considerations from an electricity grid perspective. We know that in Australia the energy usage is increasing nationally and we need to reduce grid consumption or create more capacity and solar is what we're seeing by far in the best way to achieve that from a residential perspective.

Maiclaire Bolton Smith:

Well, as you just mentioned, Tom, the residential perspective, this goes far beyond residential, though commercial real estate must have impacts on a broad perspective as well too. Can we talk a little bit about the demand for renewable energy, how AI is going to help with this as well. When we look at commercial properties, I'm just thinking of offices built, the energy usage in commercial structures is far beyond that of residential homeowners. So can we just talk about the commercial perspective about this as well too? Tom, why don't we start with you?

Tom Coad:

In Australia, we've got quite a mature approach to commercial, and I'm thinking office buildings, warehouses, et cetera. Similar to the residential scheme, there is a commercial property scheme called neighbors that measures not just how efficient that property is, but the ongoing consumption of energy use in those properties. And over the past almost a decade now, we have seen people and I guess purchases and tenants in those types of buildings have far better access and understanding to how efficient that property could be and to what tenants are using in that property to understand their needs. But there is a far broader conversation outside of those office buildings that we are yet to explore here in Australia.

Maiclaire Bolton Smith:

Pete, what about in the US on the commercial side?

Pete Carroll:

What I'll say is, what I'll touch on Maiclaire is data centers and the emergence of AI models on those data centers, right? So according to the Electric Power Research Institute, data centers powering advanced AI models could account for up to 9.1% of the US' overall energy demand by the end of the decade.

Maiclaire Bolton Smith:

That's huge.

Pete Carroll:

Yes. I mean indeed, right? I include the 0.1% because that's a lot, right?

Maiclaire Bolton Smith:

It's not trivial

Pete Carroll:

That scale, right? Yeah, exactly. Today that consumption is roughly 4%, which is still a lot, right? But I mean that's more than two x. This is going to put data centers in direct competition with households for energy and this will cause energy cost to rise, right? We're already seeing that happen. There's a lot of talk about rising energy bills and there is concern that households are helping offset the cost of this enormous consumption of these sites that are powering these AI technologies states across the US are looking for a solution. One solution is to build out additional infrastructure power plants and transmission lines, but that'll cost somewhere to the tune of billions of dollars. Another more immediate solution is for individuals to invest in solar. So solar panels directly provide energy to homes and can help circumvent rising electricity costs, even lowering them over the long term. Plus as we mentioned before, they also help increase the value of a home. So while there's lots to do to make sure that comes together the right way, if we can get there, it can really help offset this challenge we're seeing.

Maiclaire Bolton Smith:

I want to shift a little bit and talk about policy. There must be a huge investment in policy in both countries about this. So is there anything specifically that we want to talk about in terms of policies that are moving in the direction of incentivizing or maybe not even incentivizing, mandating renewable energy? Pete, why don't we start with you?

Pete Carroll:

You bet. We have seen some big plays in the us, particularly during the Biden administration that was designed to do just that, which is maximize the benefits of renewables for communities. The US approach that was taken here was the greenhouse gas reduction fund. I mean there were many, many initiatives, but one that kind of stands out, the context of this discussion would be the Greenhouse Gas Reduction Fund. It was in the us, the biggest initiative by far, it was part of the Inflation Reduction Act of 2022. Think of it as a massive program with billions of dollars set aside to help finance clean energy projects including residential retrofits, but also commercial and all manner property. The whole idea behind the spun was to ensure that these investments actually lead to real tangible benefits for homeowners. Things like the topics we've been describing, lower utility bills, increases in home value. Much of this funding is currently on hold due to pending litigation, but work continues behind the scenes to develop the tools and modeling that we were describing and discussing to help homeowners figure out if a project is right for 'em. And what I would say is as well, that states are going to become increasingly more active on this front. For example, there may have been at one point a California initiative to try to spur solar adoptions that I could see that activity kicking up marketly that states will just take on the obligations to try to keep pushing this activity forward.

And so, I think the big picture is that investments are underway to get more renewables into our communities. While the US is facing some temporary roadblocks at the federal level, they may get offset at the state level. And regardless, the through line narrative remains the same. That using smart policy to make clean energy financially beneficial and accessible for everyone is the through line narrative that's going to stay the same.

Maiclaire Bolton Smith:

Gotcha. And Tom, what about Australia?

Tom Coad:

So, in Australia, the, I guess use of solar and residential properties is really common. What we've seen is a move almost beyond just the solar panels and the solar systems and even batteries that support those into looking at how do you most effectively and efficiently use any of the energy source that comes into the property. So I talked a little bit around how the impact on the grid electricity grid and how that needs to be reduced in order to keep up with the increasing energy demand. So a few things have happened off the back of that. The first was in 2023, the energy round table looked at providing about a billion dollars of funding for home energy and electrification upgrades that has been administered through the Clean Energy Finance Corporation that in simple terms allows lenders like banks to offer those cheap interest rates to homeowners and investors to improve their property, whether that's adding solar panels or adding EV charging ports or improving the insulation in properties. That funding is now easier for a homeowner to get access to than it was previously. The other significant stream that we've seen is around assessing those properties, and we talked a little bit about the UK and how homeowners are having someone go out to the property and complete those assessments. We're now starting to see that occur in Australia as well. And over the first last nine months or so, we've had the existing home trials. So all new properties have a minimum standard they must be built to from an efficiency perspective. We're now seeing a consistent way to measure everything that already exists, which is by far and away the biggest user of energy, the largest demand, and probably the biggest challenge in becoming more efficient.

Maiclaire Bolton Smith:

I like to end these podcasts always and say, if you know, so pull out your crystal balls and what can we think of the future of renewable energy, specifically from the policy holder perspective. Where do we see this going as we move towards, I mean, I'm thinking specifically about some of these stats that you guys have just used on not just the residential usage, but think of these big data centers and how they're using all of this energy and how renewables can really play a role in helping us survive that and helping our planet survive that. So Tom, why don't we start with you? What does your crystal ball say? What does the future look like for policy?

Tom Coad:

What we found, one of the interesting findings from the report was that there was a new subdivision that had 99.3% of properties with solar. I think that if we are looking forward, if I'm crystal ball gazing, that's the aim. How do we get to 99.3% of all properties with solar and how do we enable that to free up demand for other areas of the economy?

Maiclaire Bolton Smith:

Yeah, yeah. Pete, what about you here in the US?

Pete Carroll:

I mean the future of renewable energy. I mean, it's a fundamental shift in how we power our lives in a tricky topic in the us, right? I mean, it's moving from centralized fossil fuel based grid to a decentralized model where communities and even individual homes are, the power plants for policymakers isn't about choosing which technology to back, it's about building the framework for this new reality. And in the US that means getting initiatives like the Greenhouse Gas Reduction Fund or other viable market based alternatives or public private on track, right? I think in my view, I think in our view, the focus is it has to be continue to be on providing accessible financing and ensuring that every project is a clear financial win for the homeowner backed by robust data. So ultimately, the path forward in the US is clear using smart data-driven policy to make renewable energy financially beneficial, easily accessible, and resilient is the key. And the future of energy is local and successful policy will be too.

Maiclaire Bolton Smith:

Okay. Well this has been so interesting and I had love to have the two of you back on in a couple of years just to see how things have changed as we really move down this path with renewable energy. So Tom and Pete, thank you both so much for joining me today on Beyond the Buildings by Cotality.

Pete Carroll:

Thanks so much for having me today. Maiclaire appreciate joining.

Tom Coad:

Thanks so much. This was great,

Maiclaire Bolton Smith:

And thank you for listening. I hope you've enjoyed our latest episode. Please remember to leave us a review and let us know your thoughts and subscribe wherever you get your podcast to be notified when new episodes are released. And thanks to the team for helping bring this podcast to life producer Jessi Devenyns, editor and sound engineer, Romie Aromin, our fact guru, Erika Stanley and social media duo, Sarah Buck and Makaila Brooks. Tune in next time for another conversation that illuminates the ideas that will define the future.

Erika Stanley:

You still there? Well, thanks for sticking around. Are you curious to know a little bit more about who we spoke with today? Pete Carroll is the executive Vice President of Public Policy and Industry Relations at Cotality. In this role, Carroll directly oversees industry and public sector engagement programs, drives enterprise strategic initiatives for Cotality and expands opportunities for the company's thought leadership, insight, brand awareness and solutions expertise within Washington D.C. and across the federal housing agencies and other stakeholders. Tom Coad leads the banking and finance segment at Cotality Australia, a data-driven technology company connecting the entire property ecosystem. Tom works closely with Australia's leading lenders to deliver advanced data powered solutions that support climate resilience, portfolio optimization, and sustainable finance goals. His deep knowledge of the Australian and New Zealand bank landscape combined with his understanding of evolving sustainability and disclosure frameworks makes him a trusted partner to banks and regulators alike.