The Local Government Working Group is actively engaging with the federal government in the shaping of two key energy-saving initiatives: the Household Energy Upgrades Fund and the Community Energy Upgrades Fund.
The Household Energy Upgrades Fund is a $1.3 billion project aimed at promoting energy-efficient home improvements through low-interest loans, and enhancing energy performance in social housing. On the other hand, the $100 million Community Energy Upgrades Fund will partner with local councils to co-finance energy upgrades in community facilities, unlocking over $200 million for impactful energy-saving initiatives.
These funds, part of the wider $1.6 billion Energy Savings Package, are part of the federal government's commitment to deliver cleaner, more affordable energy to Australians. Our working group is working to ensure these initiatives are optimally designed and implemented for creating healthier, zero emissions, climate-resilient and better communities.
We invite you to read our letters and consider how Australia can best design and implement these initiatives.
30 June 2023
Dear Assistant Minister McAllister,
We extend our thanks for the meeting on Wednesday 14 June and for your guidance and advice. Representing the Better Futures Australia Local Government Working Group, this letter serves to follow up on the points discussed and respond to your request for information on financing models.
We appreciate your leadership of the Energy Futures Plan, the National Energy Performance Strategy and insights shared to the design and implementation of the $1.3 billion Household Energy Upgrades Fund. We believe local governments are ideal delivery partners due to their ability to act as trusted providers of targeted programs, especially for vulnerable community members, and their reach to diverse audiences with trusted communicators and locally specific information.
During our meeting, we discussed the embargoed report from the Cities Power Partnership and University of Melbourne’s Melbourne Centre for Cities, ‘Many Hands Make Light Work’. This report underscores the importance of a coordinated approach to climate action from the three tiers of government. It also highlights three key asks developed by our Working Group, including how a multi-level governance framework can promote solutions across Australia’s built environment sector.
In response to your request for information on successful On-Rate/Rate-Based Financing Models in housing projects, we have begun compiling examples, provided in Attachment A. We are also preparing a summary of how council-led initiatives can influence emissions and energy performance, which will be shared once available.
To discuss these and other opportunities for local government household energy programs further, we would appreciate your support in planning a follow-up meeting with a local government community of practice, members of your team, and the Department of Climate Change, Energy, Environment, and Water.
We are also eager to follow your advice to engage directly with the Clean Energy Finance Corporation regarding the potential role of councils and cities in implementing the Household Energy Upgrades Fund. Your assistance in identifying the appropriate contact point would be greatly appreciated.
In addition to our discussion of household and business electrification opportunities, we have also prepared a set of recommendations for the recently announced Community Energy Upgrades Fund. We welcome any feedback on our recommendations to improve the Fund, outlined in the letter to you and Minister McBain in Attachment B.
As part of our ongoing efforts to engage key local government stakeholders and progress these initiatives, a number of Better Futures Australia’s Working Group partners are co-designing the Household Electrification Summit scheduled for October 2023. This will provide a platform to discuss opportunities for local governments to electrify households. We believe your participation and insights at this summit would be invaluable, and we look forward to extending an official invitation to you soon.
We are confident that our continued collaboration will accelerate progress on Australia’s climate targets and build the resilience of our communities. Thank you for your continued engagement and support. Should you have any questions or concerns, please do not hesitate to contact Better Futures Australia’s local government partners via the Program Director Lisa Cliff at [email protected] or 0429 998 315.
Sincerely,
Lisa Cliff
Better Futures Australia
Attachment A: Local Government Initiatives for Sustainable Energy Use and Emission Reduction
Some examples of successful local council and city initiatives and programs that have been implemented to promote sustainable energy use and reduce emissions are provided below.
This program has successfully installed rooftop solar PV for over 2000 households. The council funded the program, paying the up-front cost and managed all contracting with the solar provider. Households were issued a "special charge", separate from the rates notice, allowing them to pay the cost back to the council over 10 years, interest-free. This model has proven to be an effective way to help households install solar at low or no cost, as long as it is adequately resourced and managed. However, it is important to note that the program is administratively complex and resource-heavy, and that council systems are not typically well-equipped to deliver these sorts of programs without significant investment of time and resources. Local Government Act variations also present obstacles to national implementation of these sorts of programs. A similar model to the Darebin Solar Saver Program is the Solar Savers program, led by the Eastern Alliance for Greenhouse Action (EAGA) with thirteen participating Victorian Local Governments. This program effectively distributes overheads and risks across multiple councils, although at a smaller scale than Darebin Solar Saver.
- Other Noteworthy Programs
These programs are not financed through rate based mechanisms but would also be worth consideration regarding program design.
- The All-Electric Homes program coordinates community purchasing at scale across the G21 region (Geelong, Surf Coast, Colac Otway, Golden Plains and Queenscliffe). It provides households the opportunity to install and/or upgrade the solar, battery, hot water and heating systems. The program will be delivered in partnership with the City of Greater Geelong and other G21 councils and will focus on education and information about the various upgrades and installations available to electrify homes.
- Council supported Environmental Upgrade Agreements (EUA) are well established in the commercial sector and could be replicated at the household scale.
- Several programs have been designed specifically to support residents with vulnerable health, such as the ACT home energy support program and the Victorian Healthy Homes program.
These examples demonstrate the potential of local government initiatives in promoting sustainable energy use and reducing emissions. We are confident that with the right support and resources, these programs can be scaled up and replicated across the country. We look forward to discussing these opportunities further and working together to drive progress on Australia's climate targets.
Attachment B: Local Government Recommendations for the Community Energy Upgrades Fund
Dear Assistant Minister McAllister,
Cc Minister McBain
As members of an alliance representing over 204 local councils and cities across Australia, we are writing to express our support for the new $100 million Community Energy Upgrades Fund. We also wish to offer our insights and recommendations to ensure its successful implementation.
We believe the new fund provides the potential to significantly reduce emissions from community facilities and drive Australia's transition to a zero-emissions, climate-resilient economy. As trusted and visible institutions throughout Australia, local governments possess the scale, expertise, and diverse skill set necessary to deliver this funding, as demonstrated by similar past initiatives such as the Community Energy Efficiency Program.
We appreciate your interest in establishing a local government community of practice to collaborate directly with Federal policymakers on the design and implementation of critical programs like this one.
For the Community Energy Upgrades Fund, we propose the following:
- Designed in close consultation with local government associations and implementation experts;
- Co-fund energy upgrades with local councils, particularly those lacking the resources to implement such upgrades on their own;
- Support feasibility studies to help councils understand how to best utilise the funding;
- Regularly review the Fund to align with Australia's updated nationally determined contributions (NDCs) out to 2050; and
- Guide the Fund by a broader strategy outlining locally and regionally determined contributions and actions towards meeting Australia's emissions reduction and climate action commitments, or nationally determined contributions under the Paris Climate Agreement.
We also echo the recommendations made by the Victorian Greenhouse Alliances to:
- Adopt a collaborative and equitable, rather than purely competitive, approach to the allocation of funding and the identification of priority projects for implementation. This could include encouraging joint funding of regional and other partnerships and ensuring equitable funding allocations across the diversity of Australian councils, with particular consideration of smaller rural councils (e.g. through requiring lower co-funding contributions and simplified application and reporting requirements).
- Streamline processes so as to ensure accessibility for all councils, including those with limited resources, and provide sufficient notice (minimum two months) of the planned opening date of the application process.
- Prioritise projects demonstrating additionality, i.e., those that would not be viable without Federal funding.
- Focus on electrification and energy efficiency, and exclude natural gas projects.
- Prioritise energy savings over emissions reductions to avoid penalising Councils already purchasing emissions-free electricity.
- Simplify and streamline reporting processes.
We are currently working to compile more detailed information on the design of the Community Energy Upgrades Fund, to be provided in coming weeks. We stand ready to work with your government to implement an effective Fund that will significantly reduce Australia's community emissions.
Should you have any questions or concerns, please do not hesitate to contact Better Futures Australia partners via the Program Director Lisa Cliff at [email protected] or 0429 998 315.
Sincerely,
Lisa Cliff
Better Futures Australia