City helps business buildings go green
Environmental improvements to buildings are one of the most significant ways local businesses can reduce their carbon footprint, but accessing the capital to invest in sustainability upgrades isn’t an option for many.
That is changing, with a City of Greater Geelong sourcing finance for projects to improve the environmental performance of buildings housing Geelong businesses under a loan scheme that requires no upfront capital and no additional security from the business.
Coastal Cold Storage has become the first Geelong business to sign an Environmental Upgrade Agreement (EUA) with the City in an effort to head off an anticipated 400 per cent rise in energy costs for the business in the coming year.
An EUA is an agreement between the owner of a building, a lending body and the local council, providing Environmental Upgrade Finance under a loan to make environmental improvements to a building. The loan is repaid by the business with repayments administered through the council.
Darren Darvill is the business owner at Coastal Cold Storage, a family-owned local cold storage business in North Geelong, and said he had never heard of a EUA before he began looking at solar panelling to offset an expected quadrupling of their power costs.
The existing power contract for the business is due to expire and it came as a shock to find that a new power contract would see the price set at four-times that under the previous contract.
Electricity is a major expense for the business and Darren said that while they had been thinking about installing solar power for some time, the impending bill shock turned the decision from a ‘we’d like to’ to ‘it’s got to be done’.
While investigating various solar systems and offers, it was suggested to Darren that they the look at an Environmental Upgrade Agreement, with the option being increasingly taken up in Melbourne but yet to be taken up in Geelong.
When we spoke this week, Darren said a 67-kilowatt (kW) solar system was in the process of being installed on the roof of the Backwell Street business.
“We will have one month of our new power rate before the solar is put on, which will be interesting, because we will see the difference with the power,” he said.
“The solar is going back into the grid, and with the rate going back up to 11 cents per KW as of July 1 that will help. I don’t know if we’ll put anything back into the grid because we use so much power, but maybe a bit in summer. We’ll have to see.”
Darren said that repaying the loan through the business’ council rates over the next 10 years, along with the ability to secure finance at a lower rate than he could have obtained through traditional business lending, made signed the EUA a no-brainer.
“If you’re there long-time you should be looking at it, but even if you’re not looking long-term I still think it’s a good idea, because the 10-year loan just rolls onto the next business through the rates and they get the benefit of the solar.”
City Director Planning and Development, Peter Bettess, said the signing of first EUA in Geelong exampled how a local small business could reduce its carbon footprint and save money.
“With business costs increasing due to rising energy prices, Future Proofing Geelong offers EUAs to assist local businesses improve their energy efficiency, resource management and environmental performance,” he said.
“It gives building owners a way to protect themselves from rising energy prices, replace old and inefficient equipment with new more efficient technologies and free up cash flow by locking in competitive long-term rates.”
Mr Bettess said businesses often didn’t have the capital outlay to make substantial energy efficiency improvements to their building.
“An EUA offers an alternative to this for eligible applicants – no upfront capital and no additional security,” he said. “They offer improved cash flows with lower annual repayments, offset by energy cost savings.”
Mr Bettess said the City’s Low Carbon Growth Plan identified energy efficiency opportunities as the lowest-cost options for reducing emissions.
The City of Greater Geelong is one of 14 Councils in Victoria offering EUAs to local businesses. The initiative setup has been funded by Cleantech Innovations Geelong, a partnership funded through the Manufacturing Productivity Network (Victorian State Government), the Geelong Manufacturing Council and Future Proofing Geelong. Sustainable Melbourne Fund was engaged to facilitate Environmental Upgrade Agreements for the City.
For more information of Environmental Upgrade Agreements and how to apply visit the the City of Greater Geelong website