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4. Financial incentives

4.1 Climate Change Fund

The NSW Government's $700 million Climate Change Fund was established in July 2007 to help businesses, households, schools, communities and government save water, energy and greenhouse gas emissions.

Current programs include:

  • $170 million in NSW Home Saver Rebates which provides rebates for households installing hot water systems, hot water circulators, rainwater tanks, dual flush toilets and the removal of inefficient second fridges.
  •  A $30 million Public Facilities Program (over five years) which provides contestable funds for water and energy saving projects in public and educational facilities in NSW. The focus is on projects delivering maximum demonstration and/or educational value. The Community Savers stream funds up to $40,000 for not-for-profit community organisations to undertake simple, low-cost water and energy saving upgrades in the facilities they use.
  • A $20 million School Energy Efficiency Program which provides funding to help reduce greenhouse gas emissions from NSW public high schools. It is being jointly delivered by the Office of Environment and Heritage (OEH) and the Department of Education and Training. Key elements of the program include full lighting retrofit for each participating school, and the supply of simple equipment for students to monitor the energy use of basic equipment at their school and in their homes.
  • A $150 million Energy Efficiency Strategy that contains a range of measures to assist families and businesses save money and help the environment by reducing the growth in energy use. The financial incentives and programs under the Strategy are listed separately in the next section.

4.2 Energy Efficiency Strategy

The Energy Efficiency Strategy allocates $150 million to a range of programs aimed at reducing energy consumption in NSW, reducing the impact of rising energy prices on businesses and the community, and delay the need to construct additional energy generation and distribution infrastructure in NSW. The incentives under the Strategy are listed below:

  • Home Power Savings Program. This $63-million program delivers free home energy assessments and free power saving kits to 220,000 eligible low-income households. Householders receive energy-efficient light bulbs, a standby saver power board, a low-flow showerhead, draught-proofing products, tap aerator, shower timer and tailored advice on other ways to save power and money. The program will help households save up to 20% on their power use.
  • Energy Efficiency for Small Business Program. This $15-million program provides on-site advice to over 10,000 small and medium size businesses. The program offers financial support for an energy assessment and tailored action plan. Subsidies of up to $5,000 are available for the installation of energy efficient equipment, including lighting; heating, ventilation, air-conditioning; air compressors; commercial refrigeration; insulation and boilers. As a result, the average small business can save up to $1,650 on power bills and 11.5 tonnes of carbon pollution per year. The Small Business Program is available to businesses using up to $20,000 in electricity a year, or those with less than 10 full time staff.
  • The Energy Saver Program. This program helps businesses and other organisations to save power, money and the environment. The program provides subsidised energy audits and other technical and project support to help business identify and implement energy efficiency projects. Companies are eligible for a subsidised energy audit if they use between 160MWh and 10 GWh of electricity per year. Companies that sign up to Energy Saver are also eligible to access the Sustainability Advantage Program including the resource efficiency module, which helps participants to save water, waste and other resources. 46% of the identified opportunities have a payback period of less than two years.

4.3 Solar Bonus Scheme

The NSW Government's Solar Bonus Scheme commenced on 1 January 2010 and will operate for seven years. The Scheme credits eligible customers that have a gross meter with a 'gross' feed-in tariff rate of 60 cents per kilowatt hour for all the electricity that their eligible solar photovoltaic (PV) system or wind turbine generates.

4.4 NSW Treasury Loan Fund

The NSW Treasury Loan Fund provides up to $40 million annually for low-interest loans, helping NSW Government budget-dependent agencies to implement projects that save water, energy and related greenhouse gas emissions and save on utility bills.

This funding program is administered by the Office of Environment and Heritage (OEH) on behalf of NSW Treasury. Once the loans are repaid, agencies keep the savings from their utility bills.

The NSW Treasury Loan Fund can be accessed in two ways:

  • Sustainable Government Investment Program - finance between $10,000 and $500,000 (or $1 million for NSW Health)
  • Performance Contracts - for larger or complex projects, implemented by an energy services company.

4.5 Environmental upgrade agreements

 On 29 November 2010, the New South Wales (NSW) Government introduced the Local Government (Environmental Upgrade Agreements) Act 2010 to establish a legislative framework for Environmental upgrade agreements in the state.

Environmental upgrade agreements provide a mechanism to secure low-risk finance for energy and water upgrades, which is attached to the land, not the building owner. The finance is repaid through council charges over time, and the costs recovered by the long-term savings on bills.

An environmental upgrade agreement must specify the following:

· the environmental upgrade works to be carried out;

· the amount of the advances or advances to be made by the finance provider under the agreement;

· the arrangements for repayment of the advance or advances known as the agreement payment arrangement.

Environmental upgrade works are works to improve the energy, water or environmental efficiency or sustainability of the building to which the agreement relates.  This has been thought to include works to air conditioning, heating and ventilation, lighting and building management systems.

The agreed repayment arrangements may require the Council to levy a charge (an environmental upgrade charge) for the purpose of discharging the building owner’s obligation to repay the advance or advances made by the finance provider under the agreement including any interest or other charges.  The agreement must provide for amounts, dates of payment and any adjustments to be made.  The Bill provides for other requirements that are to be included in the agreement. 

The agreements are on a voluntary basis, though the Bill does state that a planning agreement under the Environmental Planning & Assessment Act may make provisions for entry into an environmental upgrade agreement.