The South Australian government has introduced legislation into parliament to legalise building upgrade finance, also known as environmental upgrade agreements, as part of an election commitment to deliver retrofit opportunities to Adelaide’s ageing commercial building stock.
Climate change minister Ian Hunter said the Local Government (Building Upgrade Agreements) Amendments Bill 2015 would allow building owners to utilise the voluntary finance mechanism to improve the energy efficiency of existing commercial buildings, with the loan tied to the property and paid back through an increase in council rates.
- See our ebook on EUAs for more information on how the mechanism works.
“The state government is keen to improve the environmental performance of our ageing buildings to help deliver economic and environmental outcomes,” Mr Hunter said.
“With one-fifth of greenhouse gas emissions coming from energy used in buildings, the need for action to improve the carbon footprint and efficiency of our existing buildings is clear.
“This makes good economic sense for building owners and occupiers, as well as businesses that can provide the clean technologies and solutions that improve building performance.”
Mr Hunter said building upgrade finance was a good way for commercial building owners to get through the split-incentive barrier, where the cost for upgrades is typically borne by owners yet the benefits go to tenants.
Local Government Association president David O’Loughlin said the voluntary financing mechanism was “another tool in our kit bag to support our local commercial and manufacturing businesses become more efficient”.
Chair of the Premier’s Climate Change Council, Bruce Carter, said the move had the potential to “bring life to our ageing building stock, reduce emissions and deliver economic benefits”.