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Energy-efficient equipment – invest now or wait and see?

Energy-efficient equipment – invest now or wait and see?

The number of businesses planning to invest in energy-efficient equipment is growing. We look at drivers behind this trend and considerations for your business.

In recent years, consumer demand for greater efficiencies has fuelled development and growth in the ‘energy efficient’ market. Hybrid cars, buses and trucks are in mass production, and Tesla recently launched wall-installed batteries. All of this has challenging the way we think of power bills.

A recent East and Partners Asset Financing Australia Index report (1) shows that only 11.2% of businesses with an annual turnover of over $25 million currently utilise some kind of energy efficient equipment or vehicle.

David Farr, our Managing Director of Asset Finance, believes there is a great opportunity for business owners to consider integrating newly developing technologies into their business.

“We are seeing growth in the number of businesses planning to invest in energy efficient equipment in the next 12 months, from 32.7% (September 2015) to 40.8% (March 2016)” Farr said.

Of these, 28.5% are considering electric/hybrid vehicles and 22.8% are investing in waste management, pollution reduction plants or other kinds of equipment.

What is the key driver behind this trend?

23.9% of businesses surveyed2 believe that investment in energy efficient equipment adds value to their brand and 21.5% link their decision to cost savings.

“Our Asset Finance Specialists are increasingly having conversations with customers on potential productivity gains from energy efficient options as well as impacts to the effective life and value of current machinery. To meet this need, we have been working to streamline finance solutions for equipment that will reduce energy costs for businesses and increase productivity in their operations.” Farr said.

With our Energy Efficient Equipment Finance, businesses can finance:

  • Hybrid and electric vehicles (cars, buses, trucks);
  • New hybrid, yellow goods and construction equipment such as bulldozers and excavators;
  • Tri-generation energy plants;
  • Solar, wind and marine power generation;
  • Energy efficient lighting.

There are some key considerations if you are investing in energy efficient or hybrid equipment:

  1. Are there any developments that may impact equipment used in your industry?
  2. Are there specific savings that will add to the bottom line?
  3. There may be environmental gains of upgrading to new models – are there immediate benefits for employees and customers?
  4. Consider potential impacts to the value and effective life of the business’s current equipment.
  5. Do you have a plan in place to take advantage of energy efficiency savings when upgrading to the latest innovations?

For more information on asset or energy-efficient finance, download the latest edition of Equip magazine, or visit our website.

1 Source: Asset Financing Australia Index report, March 2016, East & Partners. Important information: As this information has been prepared without considering your objectives, financial situation or needs, you should, before acting on the advice, consider its appropriateness to your circumstances