Environmental upgrades form a pivotal part of the North Sydney Council’s program to reduce both greenhouse gas pollution and the cost of apartment living in this area.

In order to implement building efficiency upgrades, the council’s Futureproofing Apartments program brings strata communities before a “rainbow selection of specialists”.

In the wake of smaller scale trials of the program conducted by other councils and state governments, the North Sydney Council secured the services of strata energy efficiency company WattBlock to initiate a scale approach over a four-month period to aid 40 apartment buildings in the placement of environmental upgrades.

This process involved education, benchmarking, analysis, technical expertise, innovative financing solutions, as well as project execution.

Brent Clark, founder/CEO of WattBlock, believes that the initial challenge lies in educating strata communities regarding the benefits and possibilities of environmental upgrades.

He regarded renewables like rooftop solar, along with hot water heat pumps, LED lighting and other upgrades, as being prime tools in this effort.

The program also leveraged NABERS to attain Apartment Buildings ratings. Clark cited this rating scheme as being a benchmark against which to measure buildings.

For certain clients, the modelling demonstrated that the installation of LED and solar features would boost the apartment building rating by two stars.

Yet for strata communities unable to afford the upfront capital cost of these upgrades, the next challenge is the identification of viable financing options to facilitate project success.

He said many alternative financing models were taken into account, but that EUAs have emerged as a forerunner.

Known officially as environmental upgrade finance, these long-term loans can cover up to 100 percent of capital required for energy efficiency upgrades.

Now it’s a fact that loans are repaid quarterly as funded by council rates, meaning that the primary financial beneficiary of the upgrade – the tenant – is responsible for the cost of the upgrades as opposed to the landlord, resolving the split incentive problem that often stands in the way of these varieties of building upgrades.

The reimbursement for tenants comes in the form of reduced energy costs.

EUAs never have been overly popular in NSW. The feedback that the North Sydney council has gotten is that EUAs need to be made more basic to suit a residential strata audience.

Another related challenge is that while EUAs can be administered for loans as little as $10,000, the ideal loan size is more sizable. This is due to the fact that to make EUAs work in a council setting, you need some volume being processed to justify all of the additional administrative work.

Clark said that although City for Sydney and North Sydney councils are enthused about NABERS for Apartment Buildings, much more work must be done before widespread environmental upgrades and energy efficiency can be achieved in strata buildings.

He said that the most significant challenge since the evacuations of buildings such as the Opal and Mascot Towers rests on the issue of core structural stability of residential strata.