Once you’ve identified energy savings or renewable energy opportunities for your farm, the next challenge is to find the funds or finance to make it happen.

There are a number of options to either reduce up-front costs or reduce the borrowing costs for the project.  The New Energy Savers Fact Sheet’s Quick Reference Guide compares a number of options available to reduce borrowing costs for efficiency and renewable energy equipment.  This can include new efficient pumps, motors, compressors, vehicles, lights, renewable energy systems and many other products.

Reducing borrowing costs

Lower interest rates are available for energy efficiency and renewable energy projects through low interest loans provided through The Clean Energy Finance Corporation’s (CEFC) Co-Financing Partnerships.   Discounts of up to 0.7% off equipment finance rates plus longer terms are available, with security generally on the equipment.  These are available through the National Australia Bank, Commonwealth Bank and Westpac.

Read here about how a Bundaberg Cane Farmer is increasing productivity and reducing energy costs by switching to a lateral irrigation system with a discounted interest rate financed via the CEFC.

QRAA, a Queensland Government Agency, offers a “Sustainability Loan” of up to $1.3M to assist with productivity and efficiency projects.  Low interest rates and fixed rates (currently as low as 3.11%) are available and they may work with your bank to co-fund a project.

The Energy Services Agreement model or “Turnkey Solution” is where an Energy Services Company designs, installs and finances the project.  In this case, you may not have any upfront costs and repay the cost of the project out of energy cost savings. In some cases, the project may be cash-flow positive from day 1.

Reducing up-front costs

There are a small number of initiatives to gain funding or grants including:

• Innovation grants for innovative renewable energy projects through the Australian Renewable Energy Agency;
• Demand Management and Power Factor Correction activities in certain areas within the Ergon and Energex network areas
• The Emissions Reduction Fund.

For Details of the programs above, please refer to the Energy Savers Financing Energy Efficiency and Renewable Energy Fact Sheet.

The Renewable Energy Target

Solar Photovoltaic (PV) Systems and other renewable energy technologies may be eligible for Renewable Energy Certificates under the Renewable Energy Target (RET).

For Solar PV systems up to 100kW a Small-scale Technology Certificates (STC) is credited (deemed) for each megawatt hour MWh the system is expected to generate until the end of the program in 2030.   The value of the STCs will be deducted from the purchase price of your system by your supplier, reducing the purchase price of the system.  In 2017, the deeming period reduced to 14 years, and will now reduce by a year on 1 January each year, slightly reducing the system discount.  STCs are also credited for solar or heat pump hot water systems, wind turbines up to 10kW and small-scale hydro plants up to 6.4kW capacity.

Larger renewable energy systems of over 100kW create a Large Scale Generation Certificate (LGC) for each MWh of renewable energy once it has been generated.  LGCs are then sold or traded at a negotiated price, usually to retailers or other businesses that have an LGC liability through an open LGC market.  The price of LGCs fluctuates based on supply and demand and the income from LGCs occurs after the energy has been generated.  It will therefore not reduce the purchase price of the system, but provide a revenue stream.