Grants and funding
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A range of government grant programs are available to assist businesses with funding energy efficiency projects. Eligibility requirements can differ significantly across programs and jurisdictions so always review funding guidelines.
Other funding sources include co-financing packages, loans, tax incentives and other innovative financing solutions. Your industry association can also be a good starting point when looking for finance as it can provide sector-specific information.
Whichever option you choose, it's worth conducting an energy assessment prior to considering finance options. Some established energy services companies recommend cost-effective improvements and guarantee the savings will cover all project costs.
Please note, the information on this website is for general information only and should not be taken as constituting professional advice. Consider seeking independent legal, financial, taxation or other advice that is tailored to your unique circumstances.
Australian Government financing
Search for support, funding, assistance packages and loans for your business from all levels of government at business.gov.au.
You can also check if you're ready to apply for a grant. This page will help your understanding of the entire grant application process and may improve your chances of getting funding.
For a list of energy programs supporting Australian businesses, see the Energy programs page.
See also GrantConnect, the Australian Government's centralised grants hub.
Tax incentives
Research and Development Tax Incentive (R&DTI)
The R&DTI provides tax offsets to encourage more Australian companies to invest in research and development.
Instant asset write-off
The instant asset write-off allows businesses to claim deductions upfront, rather than through depreciation.
Small and medium businesses can immediately deduct the full cost of all new asset purchases until 30 June 2023.
The measure allows businesses with up to $5 billion in aggregated annual turnover or total income to immediately deduct the full cost of eligible depreciable assets of any value.
This measure can be used by Australian businesses for all eligible assets acquired from 7.30pm on 6 October 2020, and first used or installed by 30 June 2023.
From 1 July 2023, normal depreciation arrangements will apply. Businesses will, however, be able to take advantage of the government’s digital economy strategy. This will allow them to self-assess intangible depreciating assets, such as patents, registered designs, copyrights and in-house software.
To read more, see the Australian Taxation Office website.
Backing Business Investment (BBI)
BBI is a time-limited incentive to support business investment by accelerating depreciation deductions. This applies to eligible assets acquired from 12 March 2020 and first used or installed by 30 June 2021.
Businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset cost.
For more information on eligibility for BBI go to business.gov.au.
Leverage tax incentives to improve energy performance
The Energy Efficiency Council has released a tax incentives guide that considers how tax incentives can be leveraged to drive energy performance improvements.
The guide outlines how energy upgrades can benefit businesses and explores specific tax incentives that can be used to improve the feasibility of such investments. It offers information and examples that demonstrate how the tax incentives can be applied in different business circumstances.
You can view the tax incentives guide on the Energy Efficiency Council website.
Clean Energy Finance Corporation (CEFC)
The CEFC is an Australian Government statutory authority formed to 'facilitate increased flows of finance into the clean energy sector'. It draws on expertise, extensive networks and market reach to make it easier for businesses and consumers to secure finance to transform their energy use.
The CEFC runs a range of programs targeting clean energy and energy efficiency improvements for small businesses, manufacturers and the agricultural sector, as well as small-scale commercial property. It also partners with external organisations to provide access to funding via co-financing.
The CEFC has comprehensive details of funding programs and a range of case studies where funding has been provided.
If you want to submit a funding proposal you will need to email or call the CEFC.
State and territory government financing
NSW
The NSW Government has tailored programs, grants and schemes for businesses working to reduce energy consumption.
Building upgrade finance is very popular with businesses. It allows for the use of private finance to upgrade non-strata commercial buildings with repayments made through the local council.
Queensland
The Queensland Government has a range of energy saving programs designed to help businesses save energy and adopt energy-efficient practices.
The Business Energy Savers Program provides free energy audits for agricultural customers and large business customers, and co-contributions to fund energy efficiency upgrades.
South Australia
The Government of South Australia has a range of energy efficiency information and programs for South Australian businesses including grants available to help businesses become more sustainable.
Victoria
Sustainability Victoria has a range of options to assist businesses to cut costs and boost productivity by saving energy and materials, as well as specialist staff to help identify funding sources.
You can use Sustainability Victoria's energy upgrades tool to find specific funding recommendations and return on investment for your energy upgrades.
The Victorian Energy Saver website also has a list of grants and support programs to help you reduce your energy use.
Mandatory obligation schemes
Mandatory obligation schemes require liable entities (generally energy retailers) to meet certain targets in relation to energy efficiency or renewable energy use.
Some of the schemes enable the trading of certificates for eligible activities which are bought by liable entities to enable them to reach their targets.
The schemes provide a financial incentive for energy users to invest in clean energy initiatives, on top of the ongoing benefits which accrue to the business through the energy savings or emission reductions generated by the project.
Various national and state-based schemes exist:
National
Companies generating energy on site using renewable energy sources may be eligible to create large-scale generation certificates (LGCs) through the Large Scale Renewable Energy Target (LRET) Scheme.
LGCs can be sold or traded to liable entities in addition to the sale of electricity to the grid. To be eligible, companies must generate their electricity from approved renewable sources and feed it into the grid.
ACT
The Energy Efficiency Improvement Scheme (EEIS) aims to maintain momentum on targets for low cost and high electricity and gas savings, give greater certainty to energy retailers about their obligations under the scheme, and harmonise the ACT system with those of other jurisdictions.
NSW
The Energy Saving Scheme (ESS) provides financial incentives to companies who undertake eligible projects that either reduce electricity consumption or improve the efficiency of energy use.
Electricity retailers and other liable parties must obtain and surrender Energy Savings Certificates to meet their energy efficiency targets, which are calculated in tonnes of carbon dioxide equivalent.
South Australia
The Retailer Energy Productivity Scheme (REPS) supports households and businesses to reduce their energy costs while also maximising the benefits to the power system.
Victoria
The Victorian Energy Upgrades (VEU) Registry is an online system that:
- facilitates the creation, registration, transfer and surrender of Victorian energy efficiency certificates (VEECs)
- facilitates the submission and approval of product applications for listing of products in the Register of Products
- tracks the ownership and status of all certificates
- maintains various public registers as required by the Victorian Energy Efficiency Target Act 2007.
Rebates and assistance
The energy.gov.au rebates sorter has a wide range of programs from the Australian Government and state and territory governments. Use it to find rebates, funding, grants, loans, support and assistance.
Other financing arrangements
Environmental upgrade finance
Environmental upgrade finance (EUF), or building upgrade finance (BUF), is an agreement where external financiers cover the upfront cost of a retrofit, which is then recovered from the building owner through a council levy.
Building owners can also pass on part of the environmental upgrade charge to tenants. The council forwards levy payments to the finance provider. These structured payments remain with the property if ownership changes.
The Building Upgrade Finance website is a collaborative initiative between the governments of NSW, South Australia and Victoria who have enabled this form of finance in their jurisdictions. The website provides an independent, single source of information, including a directory of providers to help you get started.
See the NSW Government and Sustainability Victoria websites for more information.
Energy performance contracts (EPCs)
EPCs are commonly used as a financing method in the commercial building sector. Energy service companies guarantee reduced energy bills for commercial tenants by identifying potential savings in a building’s operations, commissioning and funding a retrofit of the building, and using the energy saved to fund the upfront costs.
This financing model overcomes the inherent barrier of split incentives where building tenants benefit from retrofits through reduced energy bills, but building owners are responsible for the upfront infrastructure costs.
Loan financing
A range of loan financing options are available. These include traditional loans but also arrangements for companies to avoid upfront costs, with repayments made using the savings generated from an energy efficiency project.
Leasing
Leasing equipment enables companies to avoid upfront costs and manage energy efficiency projects within operational budgets.
On-bill financing
On-bill financing allows businesses to install and upgrade energy efficiency equipment which is financed by the energy utility. Repayments are made by the business through their monthly power bill and ownership is transferred on final payment of the finance.
Up-front capital is not required and repayments can be equal to or less than the energy cost savings achieved.
Read more
Check if you're ready to apply for a grant Australian Government
Energy Efficiency and Renewables Finance Guide NSW Government
Finance energy upgrade projects in your business Victorian Government
General questions about environmental upgrade agreements NSW Government
A Best Practice Guide to Energy Performance Contracts Energy Efficiency Council
Leveraging tax incentives to improve energy performance: a guide for Australian businesses investing in smart energy management Energy Efficiency Council
