South Australian (SA) commercial building owners will be able to access loans to improve the environmental efficiency of their existing buildings after the State Government welcomed the Local Government (Building Upgrade Agreements) Amendments Bill 2015 last week.

The Environmental Upgrade Finance agreements aim to facilitate low cost carbon abatement in the buildings sector, while protecting building owners and tenants from increasing energy costs.

Acknowledging the difficulties commercial owners can face in getting finance for green investments, and the struggle with a ‘split-incentive’ barrier for leased buildings where tenants enjoy the benefits of the upgrade but owners bear the costs, Climate Change Minister Ian Hunter said the loans will be tied to the property, and paid back through an increase in council rates.

“The Building Upgrade Finance mechanism will allow the loan to be tied to the property, rather than the property owner, and loan repayments will be collected via a local government charge levied on the property and passed on to the financier,” he explained.

“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.”

The draft legislation was open for consultation early last year, and its passing has been welcomed by both the Local Government Association and the Premier’s Climate Change Council.

“Building Upgrade Finance has the potential to bring life to our ageing building stock, reduce emissions and deliver economic benefits,” commended Chair of the Premier’s Climate Change Council, Bruce Carter.

The introduction of the voluntary finance mechanism is part of a $1.9 million election commitment to drive investment in sustainable commercial buildings.

It is one of a series of strategies the government has put in place, including the 30 Year Plan for Greater Adelaide, phasing out the installation of inefficiency water heaters, encouraging the uptake of household solar panels, and encouraging low carbon innovations through the Building Innovation Fund.