SAF supported negotiations with Cooking Space’s landlord enabling them to purchase solar with 100% finance.
Sector: Retail (CNI)
Address: 103-105 Deakin Avenue Mildura VIC 3600
Environmental upgrade: 99kW Solar PV system
Key drivers: Reduce energy costs
Interaction with SMF: Engaged SMF to finance EUA under a fixed rate arrangement
How can a tenant renovate its premises in a way that benefits both the business and its landlord, at no cost?
Ritchie’s Mildura is a local IGA supermarket located in the Rural City of Mildura, Victoria. The business leases their premises, from an unrelated party. With an interest in reducing its power bills, Ritchie’s was keen to install a solar system. But would the cost be worth it? If permanently fixed to the roof, the solar system would provide no long-term benefit if Richie’s moved locations.
If prospective works to a building provide an environmental benefit, capital can be accessed via an EUA (Environmental Upgrade Agreement). In this case, an EUA would give Ritchie’s the finance for a bespoke solar system that would cut power bills – without any upfront, out-of-pocket expense.
Securing an EUA was simple. SMF (Sustainable Melbourne Fund) completed all the paperwork and financed the landlord the capital it required. SMF also locked in a long-term fixed rate, giving Ritchie’s the ability to calculate its energy consumption in relation to cost, minimising risk. The EUA also enabled the landlord to own the system and improve the building and recoup the expense from the tenant via the EUA.
Building upgrades via an EUA provide win-win benefits for both tenant and landlord. The asset improves in value, while a business saves on energy costs without encumbering its balance sheet.
“Power has gone up almost 15 per cent for us,” Ritchie’s Mildura store acquisitions and project manager Paul Papson says. “An EUA is great because it helps with the higher price of power.”