A Progressive Financial Deal to Provide Better Outcomes for Low Income Families

Shannon O’Connell from SGCH reports on what they’re calling an Australian-first for providing new environmentally sustainable, affordable homes across Sydney.

Low income households are one of the most vulnerable groups when it comes to rising energy costs. In 2012, ABS survey data showed that households who received most of their gross weekly income from a government pension spent close to 10 percent of their income on total energy costs, which is approximately twice that of other households.

There is also evidence to suggest low income households tend to live in buildings with poorer energy efficiency leading to higher energy costs, as well as significant financial and health effects.

The Australian Council of Social Service’s report, Energy Efficiency and People on Low Incomes, also found that disadvantaged households demonstrate an energy conservation response to higher prices (e.g. avoiding using cooling and heating) rather than an energy efficiency response. This is because there are barriers that stop people on low incomes from investing in energy efficiency upgrades, including cost and the inability to install energy-efficient improvements in rental properties.

Given the number of people living on low incomes and struggling to meet rising rents and energy costs, finding innovative ways to deliver social and affordable housing that is energy-efficient makes good sense. Not only does it give better outcomes to low income families by lowering their energy bills and increasing their thermal comfort, it provides long-term savings for community housing providers with landlords and environmental benefits for the community through a reduced carbon footprint.

In an Australian first, SGCH and the Clean Energy Finance Corporation (CEFC) formed a partnership in 2015-16 to deliver an innovative solution to providing new environmentally sustainable, affordable homes across Sydney. At the same time, SGCH is using CEFC finance to retrofit some of its existing properties, delivering energy-efficient measures to over 1,100 very low and low income households.

In March 2017, SGCH and CEFC announced a further $130 million finance facility that will fund 300 new energy-efficient social and affordable homes. These will be built under the first phase of the NSW Government’s Social and Affordable Housing Fund (SAHF). The combined investment of up to $170 million is the largest single debt finance facility committed to a community housing provider in Australia.

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