This project enabled the expansion of the commercial rooftop solar market across Victoria by increasing the number of local governments offering innovative finance for such projects where loan repayments are made via Council rates.
Environmental Upgrade Agreements (EUAs) are a council-based financing mechanism that help businesses access funding for building works to improve energy efficiency, reduce waste and cut water use. In 2015, local government legislative changes allowed EUAs to be offered across Victoria. However, councils generally lacked the knowledge and experience to offer them to their communities.
This project overcame previous barriers to the expansion of renewable energies to commercial buildings by enabling an innovative funding structure through local governments. Using council rate structures, building owners and tenants are both able to be the financial beneficiaries of the installation of renewable energy. These funding structures enabled the loans for the installation of rooftop solar to be repaid through council rates.
The Sustainable Australia Fund (previously known as the Sustainable Melbourne Fund) began within the City of Melbourne in developing and supporting such funding structures. Following the introduction of legislation that opened up this program to other councils, the fund worked in partnership with councils across Victoria to establish their own funding structures, including creating procedures and review mechanisms. This was achieved under the Better Building Finance brand to differentiate from Sustainable Australia Fund, which works with businesses.
This project removed a key barrier to the expansion of the commercial rooftop solar market. By assisting local governments to create funding structures that supported the business case for installing rooftop solar for both commercial building owners and tenants, it demonstrated the potential for more business across Victoria to shift to using renewable energy.
The Sustainable Australia Fund’s Better Building Finance team have achieved, as part of this project:
- end-to-end EUA processes and existing forms and templates have been adapted to be used across Victoria
- 32 Victorian councils offering EUAs, with 28 more in the initial discussion phase
- 65 EUAs signed with a combined value of $27.9M
- business owners have saved more than $3m annually due to these upgrades
- more than 300,000 tonnes of C02 abated.