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Energy savings and resource efficiency

Business

Case study - chattel mortgage

Using a chattel mortgage Col Crawford Lifestyle Cars installed a 260 kW solar system at their northern beaches car dealership. The solar retailer, Autonomous Energy, also integrated an energy efficiency lighting upgrade into the project. The total project will save Col Crawford around $175,000 annually. The use of a chattel mortgage makes the project cash flow positive from year 1.

 

 Product                           Chattel mortgage                                                                       
 Customer  Col Crawford Lifestyle Cars - car dealership (Brookvale, NSW)
 Project

 260 kW solar system generating 373,109 kWh of solar electricity per year, combined with an energy efficiency lighting upgrade saving 291,321 kWh per year.

 Net cashflow Yr1  $59,931 
 Repayments  $10,3000 per  month over a 7 year term
 Benefits

 $14,544 a month in energy bill savings.

 Expected net savings of $50,931 on annual bills after solar electricity payments.

 Retailer  Autonomous Energy
 Financier  Clean Energy Finance Corporation and a retail bank

A multigenerational family owned business, Col Crawford is one of the largest car dealerships on Sydney's northern beachers. They decided to pursue a comprehensive sustainable energy upgrade to fulfil a number of business objectives including protecting the environment, reducing operating costs and hedging against future increases in energy prices.

To help them deliver this project Col Crawford decided to work with an experienced solar retailer, Autonomous Energy. Autonomous Energy helped them integrate solar power and energy efficiency into the one energy saving project. By integrating the solar and lighting projects, they were able to improve the technical, environmental and financial outcomes delivered.

To be confident that the project would continue to perform over time, Col Crawford chose a high quality system and for Autonomous Energy to manage performance risk by taking responsibility for design, supply, installation, commissioning, remote monitoring and ongoing maintenance. The project included installing nearly 1000 panels and a comprehensive lighting upgrade. Over half the panels were integrated into the roof of a new car park shade structure.

Before going ahead with the project, Autonomous Energy provided Col Crawford with a detailed feasibility study.

The study showed, for an investment of $736,053 ($602,464 for the solar system and $133,589 for the lighting) the outcome would be:

  • $174,531 total annual bill savings
  • $15,592 annual revenue from certificates under the Large-scale Renewable Energy Target.
  • A simple payback of 4.04 years

Col Crawford wanted to finance the project to achieve immediate bottom line savings without the need for large capital expenditure. They considered a power purchase agreement and a chattel mortgage. A chattel mortgage from a major retail bank with wholesale funding support from the Clean Energy Finance Corporation was chosen as it delivered much higher savings over time.

The financial details:

  • $10,300 monthly costs (including loan repayments, interest and fees) over seven years
  • $14,544.25 total monthly energy bill savings
  • In the first year, the project was already $50,931 cash flow positive.
  • After the financing has been repaid, annual savings will be closer to $158,940 per year.

Over the 20 year life of the system the financial returns are:
  • Internal rate of return: 26.07%
  • Net present value (20 years, 5% discount): $1,9000,663
  • Average electricity (price over 20 years): $0.0541

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Page last updated: 27 January 2016