Building up to
The introduction of agreements to upgrade hundreds of office buildings across Australia to make them more environmentally efficient has been reported on the Department of Resources, Energy and Tourism’s Energy Efficiency Exchange website, eex.gov.au.
According to the report, the introduction of Environmental Upgrade Agreements (EUAs) by a number of Australian councils was expected to unlock billions of investment dollars into commercial building retrofit projects.
“In 2010, EUAs were developed under the City of Melbourne’s 1200 Buildings program to address two key barriers to the retrofitting of the city’s existing commercial building stock: access to capital for environmental upgrades and what is commonly referred to as the split incentive,” the report says.
“This latter term refers to the inequitable accruing of savings between the stakeholders of a building as a result of environmental upgrades, where often the building owner pays for energy efficiency upgrades only for the tenant to benefit by way of reduced electricity bills.”
The report says to overcome such barriers, the City of Melbourne worked with the Victorian State Government to amend the City of Melbourne Act 2001 and enable Council to levy a new form of statutory charge (the environmental upgrade charge).
“In an Australian first, this amendment allows the council to become involved in the funding mechanism by facilitating collection of repayments via the environmental upgrade charge and ranking it a priority ahead of other debts and charges in the event of default,” it says.
“By providing this level of security, finance providers have viewed such loans as lower risk, and therefore have been prepared to offer environmental upgrade finance to customers at lower interest rates and for longer terms.
“For small to medium property owners especially, it means finance for building retrofits that lead to environmental performance improvements is substantially easier to access.”
Edition 345, 22 January 2013