More than 200 energy efficient low-income and affordable homes are set to be built by not-for-profit community housing provider SGCH under an Australian-first agreement reached with the Clean Energy Finance Corporation.
Under the deal the CEFC will provide up to $60 million in long-term senior debt that will see new social and affordable housing built to high energy efficiency standards, as well as the retrofitting of some of SGCH’s 4300 existing properties.
The new CEFC-financed properties will be built to a seven star NatHERS standard for townhouses, villas and duplexes, or 4 Star Green Star for apartments.
SGCH has engaged an environmental advisor to determine the most effective program of energy efficiency measures for existing building upgrades, with measures being looked at including:
- solar panels
- heat pumps
- high performing insulation for roofing and building walls
- LED lighting
- draught-proofing windows and doors
One of the main benefits of the program is reduced energy bills for tenants. Australian Council of Social Services figures show that the lowest income households spend seven per cent of their disposable income on energy bills, compared with 2.6 per cent for the highest income households.
“Improving the energy efficiency of low-income households in social housing will help improve affordability, climate resilience and create a better living environment for tenants,” CEFC chief executive Oliver Yates said.
“People on low incomes are particularly impacted by rising energy prices, but they lack the capital for energy efficiency upgrades and are more likely to own inefficient appliances.
“With an estimated 400,000 social housing households nationwide, it makes good sense to improve energy efficiency and help reduce energy costs for low income households.”
Mr Yates said the CEFC was able to make finance available over longer time periods than was standard, allowing the benefits of lower operating costs to be passed on to the tenants.
Speaking to the The Fifth Estate, CEFC chief operating officer Meg McDonald said the body was “ecstatic” to be involved in the Australian-first partnership, because not only did it reduce the energy bills of those most in need, it also helped to increase the building stock in an area that is currently greatly undersupplied, seeing increasing demand and subject to long waiting lists.
Ms McDonald said the project was being viewed as a demonstration of preparedness to hopefully do a lot more in the sector.
“We’re hoping to be able to duplicate this in another state,” she said.
SGCH acting chief executive Trevor Wetmore said the new housing and upgrades would make a big difference to tenants.
“For our tenants who live on low to moderate incomes, the savings they will see in their energy bills can make a real difference,” Mr Wetmore said.
“CEFC’s long term finance of energy efficiency projects will not only improve the lives of social and affordable housing tenants, it will also mean reducing SGCH’s operating costs.
“The more we can save on energy costs, the more we can reinvest into housing for those most in need.”
While the CEFC has had experience investing in the commercial property sector, this is its first foray into the residential market. Part of the program will be to measure how the energy efficiency and environmentally sustainability measures flow to real cost savings for tenants.
“Working with SGCH in this program will demonstrate the potential for a community housing sustainability program that can be implemented in other cities and regional areas,” Mr Yates said.
“As part of this project, SGCH will document the energy efficiencies and green procurement opportunities that were considered and included in the building design to help with the ongoing management of its portfolio. It will in addition help inform the CEFC’s future investment priorities in the sector.”