The Clean Energy Finance Corporation has unveiled a landmark $250 million program to create 1000 new energy efficient community housing developments, and to increase the efficiency of existing stock. And according to CEFC chief executive Oliver Yates it is a program that should be expanded to sectors such as aged care, hospitals and schools.
The new houses will be built to an average seven star NatHERS rating, expected to translate into a 25 per cent cut in energy use. To get to the standard, a range of measures are set to be included, such asenergy efficient building materials in construction, double glazing, and high-quality insulation and ventilation. Finance for upgrades is expected to be approved for features such as LED lighting retrofits, updating household appliances, installing solar panels and improving insulation.
The program builds on a previous CEFC initiative that provided $60 million in long-term senior debt to community housing provider SGCH to build energy efficiency housing, as well as retrofit some of SGCH’s 4300 existing properties.
CEFC housing sector lead Victoria Adams said the program would fill a funding gap, and provide community housing providers with access to long-term debt finance aligned to the providers’ portfolio needs.
“Community housing is already a substantial part of Australia’s overall housing stock, and is expected to experience strong growth in the years ahead because of high tenant demands,” Ms Adams said.
“Community housing providers have typically faced financing constraints which has limited their ability to invest for the long term. We see this finance program as an important way to help ensure new dwellings are built to meet this growing demand, and that new buildings have stronger energy efficient standards, so tenants can experience the benefits of lower energy costs over the longer term.”
Mr Adams said the CEFC’s discussions with the community housing sector had revealed that energy costs were a “substantial burden on low income tenants”.
“By giving providers access to long-term debt finance, we are helping them unlock the benefits of energy efficiency through better construction options. This CEFC finance will work alongside other relevant government housing initiatives, delivering long-term benefits for our cities and the built environment.”
The program aligns with the CEFC’s updated investment mandate, which focuses on the government’s cities and built environment agenda, even though the government is still committed to axing the body.
Speaking with The Fifth Estate, CEFC chief executive Oliver Yates said that a similar program could work in other sectors, such as aged care, hospitals and schools.
“We’re still continuing to build junk in this country,” he said, adding that upgrading energy efficiency in buildings would save money in the long term.
“If we can do it with government finance that generates positive income for the taxpayer then we better get on with it.”
Mr Yates told the Senate Estimates Committee on Tuesday that the CEFC as of December 2015 had made $74 million in profits.
Market report into community sector
News of the program has come at the same time as the release of a CEFC market report into community housing, the second such report the body has released to provide insights into sectors that would benefit from clean technology.
The report said there were more than 200,000 approved applicants on social housing waitlists across the country, and that given the demand for housing that there was a “significant requirement” for debt finance from community housing providers, which the CEFC could assist with.
“If 5000 new community housing dwellings were built each year, $15 billion of investment would be required over the next 10 years,” the report said.
The market report said that community housing needed to be built to “ambitious” energy standards.
“Evidence indicates that low-income households tend to live in buildings with poorer energy efficiency, leading to higher energy costs,” it said. “Poor building energy efficiency and high energy costs can have significant financial and health effects on households in community housing.”
The report noted there were many energy efficiency improvements the sector could action with paybacks of five years or less, which could be incorporated into the building fabric during construction.
“New-build community housing should be designed to ambitious energy efficiency standards and the existing stock should be refurbished to improve energy efficiency.
“While energy efficiency improvements involve upfront costs, more energy efficient community housing would lower energy bills and increase thermal comfort, improving households’ financial, health and social outcomes as well as reducing carbon emissions.”