A range of government grant programs are available to assist companies with funding energy efficiency projects. Eligibility requirements can differ significantly across programs and jurisdictions, so reviewing funding guidelines is an important first step.
Funding sources also include co-financing packages, loans, tax incentives and other innovative financing solutions. Many are designed to support transition to a low carbon economy or to help overcome barriers to energy efficiency uptake.
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, this will help you determine where gains may be made. Remember, when you do conduct an assessment, it’s worth knowing that some established energy services companies will not only recommend cost-effective improvements, but guarantee the savings will cover all project costs.
Please note, the information in this website and the links provided are for general information only and should not be taken as constituting professional advice. You should consider seeking independent legal, financial, taxation or other advice to check how the website information relates 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.
For a list of energy programs supporting Australian businesses, see the Energy programs page.
See also GrantConnect, the Australian Government's centralised grants hub.
Research and Development Tax Incentive
The Research and Development Tax Incentive 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.
See the ATO for more information.
Backing Business Investment
Backing Business Investment (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.
Go to business.gov.au for more information on eligibility for BBI.
Clean Energy Finance Corp
The Clean Energy Finance Corp (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.
Business Energy Advice Program
The Business Energy Advice Program (BEAP) delivers trusted advice to help small businesses and their representatives get better energy deals and increase their energy efficiency.
The program provides 2 free services for eligible small businesses:
- An energy advisory service that delivers face-to-face, phone and digital advice to small businesses across Australia.
- An energy spend benchmarking tool that allows small businesses to compare their energy spend against similar businesses in their industry and region.
The service is available to eligible small businesses in all Australian states and territories.
You can register for a free consultation by calling 1300 415 224 or visiting businessenergyadvice.com.au.
For more information, see the Business Energy Advice Program page.
State and territory government financing
The NSW Government has tailored programs, management tools, training services and discounts and incentives for businesses working to reduce energy consumption.
The Environmental Upgrade Agreement program is very popular with businesses - it allows for the use of private finance to upgrade non-strata commercial buildings.
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.
The South Australian Government has a range of energy efficiency information and programs for South Australian businesses including grants available to help businesses become more sustainable.
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.
The Victorian Energy Saver website has a list of grants and support programs to help businesses reduce 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:
Companies generating energy on site using renewable energy sources may be eligible to create large-scale generation certificates (LGCs) through the LRET. LGCs can be sold or traded to liable entities, in addition to the any sale of electricity to the grid. To be eligible, companies must generate their electricity from approved renewable sources and feed that into the electricity grid.
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 Australian Capital Territory system with those of other jurisdictions.
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.
REES is an initiative that requires energy retailers to help households and businesses save on energy use and costs, and lower their greenhouse gas emissions.
The 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
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 equipment enables companies to avoid upfront costs and manage energy efficiency projects within operational budgets.
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.
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.
Environmental upgrade agreements
Environmental upgrade agreements involve external financiers covering 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 these levy payments to the finance provider. These structured payments remain with the property if ownership changes.
A Best Practice Guide to Energy Performance Contracts Energy Efficiency Council
Business Funding Guide Australian Government
Energy Efficiency and Renewables Finance Guide NSW Government
Finance energy upgrade projects in your business Sustainability Victoria
FitsME - Essential Guide to Business Funding Australian Government
General questions about environmental upgrade agreements NSW Government