Finance mechanism to deliver better green buildings

South Australia has introduced a parliamentary bill that, if passed, will improve the sustainability of the state’s commercial buildings, drive clean energy jobs and reduce energy costs.

The Green Building Council of Australia (GBCA) has praised the Building Upgrade Agreements legislation that forms part of a $1.9 million election promise to encourage investment in the state’s sustainable commercial buildings.

“We applaud the Weatherill Government for addressing the environmental performance of the state’s ageing buildings. This new legislation will help deliver both economic and environmental benefits, reducing emissions and energy costs, while also improving occupant health and wellbeing, providing employment and securing the long-term sustainability of building assets,” GBCA chief operating officer Robin Mellon said.

“One of the GBCA’s advocacy priorities is for governments to encourage and enable the upgrade of existing buildings through financial and non-financial incentives. This new legislation will pave the way for smarter, more sustainable buildings.”

The Building Upgrade Finance mechanism enables finance to be tied to the property, rather than the property owner, with loan repayments collected via a local government charge levied on the property and passed on to the financier. This addresses the ‘split incentive’ barrier, in which tenants gain the benefits of an upgrade, while building owners bear the costs.

“Access to affordable finance options is an issue for many building owners. Without access to grants, tax relief or alternative financing options, many building owners find it too difficult to invest in building upgrades. This new measure will enable South Australia’s property industry to unlock the energy efficiency potential in their buildings,” Mr Mellon said.

“Building upgrades make economic and environmental sense, and we congratulate the South Australian Government for making it easier for them to happen.”