Finance energy upgrade projects in your business

There are a range of finance options that can help pay to upgrade to more energy efficient equipment or install renewable energy.

Often these finance options improve short-term cashflow.

Traditional finance

Traditional finance is typically provided by major banks and financiers who offer equipment finance such as loans or leasing agreements.

Capital lease finance

A financier buys energy efficiency equipment for your business and you pay it back over time.

Capital lease is a contract where a financier buys renewable or energy efficient equipment for a business who pays it back over time.

It may be suitable for businesses that want to invest in high-value equipment which has a medium or long lifespan, that isn’t going to become outdated quickly.

Equipment loan (chattel mortgage) finance

Equipment loan is a contract where a financier loans a business money to buy renewable or energy efficient equipment.

The financier takes out a ‘mortgage’ on the equipment which forms which part of the collateral should the business fail to pay off the loan. Equipment loan is also known as chattel mortgage.

It may be suitable for businesses that want to invest in high-value equipment which has a medium or long lifespan, that isn’t going to become outdated quickly.

Hire purchase finance

Hire purchase is a contract where a financier buys renewable or energy-efficient equipment for a business to hire and use. At the end of the lease, the business has the option to buy the equipment.

It may be suitable for businesses that want to invest in equipment with medium value or lifespan.

Operating lease finance

Operating lease is a contract where a financier buys renewable or energy efficiency equipment for a business to hire and use.

It may be suitable for businesses that want to invest in lower value equipment with a short life span, that might become outdated quickly.

Innovative finance

Innovative finance often involves a third party but don’t always involve a bank or a financier. This type of financing can be more unique to your business, which often makes it more complex.

Energy Services Agreement

An Energy Services Agreement is where an energy services company project manages the installation of energy efficient equipment for a business. In some cases, they can guarantee savings from the equipment.

The business pays monthly instalments to the energy services company or a bank, to pay off the equipment over the agreement period.

It may be suitable for businesses that:

• have high energy related costs
• own or have a long-term tenancy of their site
• are considering numerous energy-saving projects
• want to outsource the design, implementation and verification of the energy savings.

Environmental Upgrade Finance

Environmental Upgrade Finance is an agreement where a building owner borrows money for environmental building upgrades from a financier and makes the repayments through the local council rates system. These repayments are known as an Environmental Upgrade Charge.

Our Environmental Upgrade Finance program has now finished.

For the latest investment opportunities in Victoria's Circular Economy visit our grants, funding and investment section.

Power Purchase Agreement (behind the meter)

‘Behind the meter’ is a model of a Power Purchase Agreement where an energy provider installs renewable energy equipment on your business’ site. You then pay a predetermined rate of electricity over time.

Renewable energy equipment is often solar PV systems.

It may be suitable for businesses that:

• want to switch to renewable energy without owning or maintaining equipment
• don't own the property and have a long-term tenancy of their site

Get a discount for your energy saving project

The Victorian Government offers businesses a discount on energy saving products that are installed by accredited Victorian Energy Upgrade providers. Check which energy saving products are registered for a discount.

Visit the Department of Energy, Environment and Climate Action website for tips to save energy in your business.