As power prices rise, demand for discount loans for energy efficient equipment climbs.
Demand for special loans for energy efficient equipment is on the rise as farmers and businesses across Australia seek new ways to offset costs, according to Commonwealth Bank lending trends and research.
Month-on-month, Commonwealth Bank is seeing strong growth in lending for new energy efficient equipment on farms.
“If we compare January to June this year, the value of new loans to farmers for energy efficient equipment has increased by more than 400 per cent and we expect this trend to continue,” says Margot Faraci, Commonwealth Bank General Manager of Regional and Agribusiness Banking for New South Wales.
Commonwealth Bank has partnered with the Clean Energy Finance Corporation to provide discounted financing to help businesses fund energy efficient vehicles, equipment and projects. Customers receive a 0.70 per cent discount when they choose to finance qualifying equipment such as fuel efficient vehicles, energy efficient lighting and fittings, farm machinery, commercial lighting and rooftop solar panels valued between $10,000 and $5 million.
“Energy prices are one of the key cost concerns weighing on the minds of Australian farmers and regional business operators,” says Ms Faraci. “Since the launch of our current energy efficient equipment finance program in October 2016, farmers have led the charge, investing in efficient equipment that helps reduce energy consumption, fuel costs and their carbon emissions. Agribusiness customers now make up nearly half of our total lending in this category.”
While farmers are at the forefront of investment in energy efficient equipment, other sectors are also increasing investment in this area. According to a Commonwealth Bank survey*, 15 per cent of businesses with an annual turnover of more than $25 million currently use energy efficient equipment in their operations, however this figure is on track to increase to 40 per cent by the end of the year.
The trends are released as Commonwealth Bank prepares for AgQuip, one of Australia’s premier primary industry field days to be held in Gunnedah between 22 and 24 August. CBA has been involved with AgQuip for 45 years.
“AgQuip is a key event in the industry calendar showcasing new technologies and innovation. Much of our on-site activity will focus on making sure more farmers are aware of the specialised finance options available so they can take advantage of energy efficient equipment in their operations,” says Ms Faraci.