It’s not just households that feel the pinch when it comes to the cost of electricity; businesses feel it too with Canstar Blue’s recent survey of small business owners finding that the cost of electricity is a major concern to 68% of businesses and 86% of small business survey respondents had actively tried to use less electricity to lower bills. An energy-efficient loan might be a solution to the issue for some.
What is an energy efficient loan?
The Clean Energy Finance Corporation (CEFC) and Commonwealth Bank are financing loans, with terms of three to seven years, to help businesses initiate projects that result in significant energy or carbon savings.
The Energy Efficient Loan program provides financing for projects valued at up to $5 million. The finance program includes $100 million for business loans, which can be used for a range of projects covering energy efficiency, low emissions technology and small-scale renewable projects. Equipment funded must meet Clean Energy Finance Corporation (CEFC) energy efficient criteria.
CEFC CEO Oliver Yates said there was opportunity for most businesses to make significant energy savings by investing in a wide range of energy savings technologies, such as lighting and refrigeration, energy efficient motors and pumps, and solar systems and battery storage.
“This clean energy finance for manufacturers and other sectors is at a scale that simply hasn’t existed before. In many cases, upgrades do more than reduce energy bills. Businesses are also benefitting from reduced maintenance costs and seeing some significant productivity gains,” said Mr Yates.
What loans are available?
Commonwealth bank isn’t the only one offering energy efficient business loans. National Australia Bank also announced, in June this year, a new initiative in partnership with the CEFC.
NAB has signed a $120 million funding program with the CEFC that will see the bank offer businesses of all sizes discounted equipment finance for assets that cut energy use or generate renewable energy.
The agreement will allow NAB to offer a rate 70 basis points below its standard equipment finance rate.
Finance will be offered through NAB, and will be across a diverse range of pre-approved assets including cars, irrigation systems, solar PV, building upgrades, lighting upgrades, processing line improvements and refrigeration.
Cindy Batchelor, Executive General Manager NAB Business, said that the potential positive impact of this deal is significant.
“With loans available for one car right through to business with an entire car fleet, we’ve got an opportunity to reach a large proportion of the business community and deliver significant environmental change,” she said.