The Rye Hotel is the first business on the Mornington Peninsula to take advantage of the Environmental Upgrade Agreement (EUA) initiative. EUAs are a new low-risk loan option to support building upgrades that benefit the business, property owner and the environment. 329 solar panels have been installed on the roof of the buildings, with a generating a capacity of 88kW of electricity. Business Description Rye Hotel is a well-established business, owned by the Capel Esplanade Group Pty Ltd. Peter Houghton and family have managed the hotel for many years. The Rye Hotel is located at the western end of the Rye shopping strip on Point Nepean Road, Rye. The business includes a bistro, café, beer garden, bar, function rooms or resort style hotel with conference facilities. The accommodation facilities include 13 beachfront plus 30 poolside suites. Business Drivers Owner and manager, Mr Peter Houghton had been contemplating the installation of solar panels at the site for some time and had already made enquiries with a solar installer. However, the main obstacle when contemplating a solar panel installation of this size was the upfront cost. Peter was committed to maximising the solar potential of the roof space, reducing the business’ carbon footprint and preparing for an inevitable increase in electricity prices. The EUA program overcame the cost barrier, allowing the savings from the reduced power bill to pay for the repayments. EUA Background EUAs are administered by the Sustainable Melbourne Fund (SMF). Rye Hotel was the first business on the Peninsula to take advantage of EUAs, and the Shire one of the first in Victoria to offer EUAs to businesses. Case study – Environmental Upgrade Agreement: Rye Hotel PICTURE DETAILS (L –R): Mornington Peninsula Shire Climate Change Coordinator Adam Shalekoff, Nepean Ward Councillor Hugh Fraser, Rye Hotel Owner and Chair of the Rye Beach Business Association Peter Houghton and Nepean Ward Councillor and Deputy Mayor Bryan Payne at the Rye Hotel. This case study details the process and outcomes of the Environmental Upgrade Agreement initiative at the Rye Hotel.
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The Rye Hotel is the first business on the Mornington Peninsula to take advantage of the Environmental Upgrade Agreement (EUA) initiative. EUAs are a new low-risk loan option to support building upgrades that benefit the business, property owner and the environment. 329 solar panels have been installed on the roof of the buildings, with a generating a capacity of 88kW of electricity.
Business Description Rye Hotel is a well-established business, owned by the Capel Esplanade Group Pty Ltd. Peter Houghton and family have managed the hotel for many years.
The Rye Hotel is located at the western end of the Rye shopping strip on Point Nepean Road, Rye. The business includes a bistro, café, beer garden, bar, function rooms or resort style hotel with conference facilities. The accommodation facilities include 13 beachfront plus 30 poolside suites.
Business DriversOwner and manager, Mr Peter Houghton had been contemplating the installation of solar panels at the site for some time and had already made enquiries with a solar installer. However, the main obstacle when contemplating a solar panel installation of this size was the upfront cost.
Peter was committed to maximising the solar potential of the roof space, reducing the business’ carbon footprint and preparing for an inevitable increase in electricity prices. The EUA program overcame the cost barrier, allowing the savings from the reduced power bill to pay for the repayments.
EUA BackgroundEUAs are administered by the Sustainable Melbourne Fund (SMF). Rye Hotel was the first business on the Peninsula to take advantage of EUAs, and the Shire one of the first in Victoria to offer EUAs to businesses.
Case study – Environmental Upgrade Agreement: Rye Hotel
PICTURE DETAILS (L –R): Mornington Peninsula Shire Climate Change Coordinator Adam Shalekoff, Nepean Ward Councillor Hugh Fraser, Rye Hotel Owner and Chair of the Rye Beach Business Association Peter Houghton and Nepean Ward Councillor and Deputy Mayor Bryan Payne at the Rye Hotel.
This case study details the process and outcomes of the Environmental Upgrade Agreement initiative at the Rye Hotel.
*assumes an average of 330 kWh is generated per day, 20% of electricity generated is exported to the grid, 80% is consumed onsite, electricity tariff is 25c/kWh and feed-in tariff is 11c/kWh
EUA ProcessRye Hotel was prepared to support SMF and MPS to establish the process as a pilot case. The process proved to be straightforward for all parties and included;
9 Consultation with SMF and Rye Hotel on project design and business case
9 Consultation between SMF and MPS to approve statutory compliance
9 Preparation of the EUA Contract and repayment schedule and declaration by SMF
9 All parties sign the EUA and payment schedule. Upfront establishment costs of $600 per EUA paid by business owner (Rye Hotel operates two separate businesses, a hotel and accommodation, hence a fee of $1200 was paid)
9 EUA Approved
9 Business draws down funds to engage contractors to undertake works
“The resource of sunlight is there for the taking…. it reduces one’s carbon footprint. EUAs are an opportunity to get ahead of the game, to assist businesses financially to manage their risk to the inevitable increases in future energy costs.” – Peter Houghton, Owner/Manager of Rye Hotel
Benefits to Rye HotelFinancial modelling demonstrated the economic benefit to the EUA model. There are a range of benefits to using an EUA, including:
9 The loan is attached to the property
9 Electricity costs may be reduced by approximately $26,000/year*
9 Return on investment at 17%
9 Positive cash flow from year 1
9 Environmental leadership and innovation in the sector
9 Media and promotion opportunities
9 Fixed interest rates, so no need to refinance the 10-year loan
Return on investment scenario for Rye Hotel and Accommodation
Project details
Environmental upgrade 329 Solar panels
Energy generation capacity 88 kW (kilowatts)
Annual energy savings 120,000 kWh* (kilowatt-hours)
Total cost $157,000
Finance summary
EUA loan tenure 10 years
2017 loan repayments $22,400
Expected annual cost savings $26,000
Return on investment 17%
Cashflow modelling for the 10 year EUA for Rye Hotel and Accommodation
Years after installation
50 10 15 20 25
$10,000
- $10,000
$0.00
$20,000
$30,000
$40,000
EUA finance period Remainder of asset life
$560,000 saved over 25 year asset life
Annual net cash flow Savings over asset life
Ann
ual c
ash
flow EUA loan
repaid
Initial $1,200 application fee for two EUAs
Further EUA details available atSustainable Melbourne Fund:
03 9658 8740 [email protected]
For more information, contact mornpen.vic.gov.au/enviro upgrades
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