Community Energy Upgrades Fund
Closed Australian grant round offering local governments AUD25,000–2.5 million for energy upgrades, covering up to 50% of eligible costs with cash matching.
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The Community Energy Upgrades Fund supports commercially available energy-efficiency, electrification and electricity-demand management upgrades to existing local-government facilities and operations. Round 2 is closed: its deadline was 13 June 2025 at 17:00 AEST. The terms below describe that round, whose projects must finish by 31 March 2028 and last no more than 24 months.
Grants range from AUD25,000 to AUD2.5 million and cover up to 50% of eligible expenditure. Projects need at least AUD50,000 of eligible costs. The applicant must fund the remaining eligible costs, every ineligible cost and overruns. Contributions must be cash. State, territory and local-government grants can contribute, but a project receiving another Commonwealth grant cannot receive this grant; applicants successful under both must choose one.
Examples include replacing a gas boiler with a heat pump, fitting efficient motor drives, installing smart council-fleet EV chargers, and solar generation or storage on the customer side of the utility meter (behind the meter), serving the facility. Demand management shifts electricity use to times when supply is more plentiful or demand lower. Several activities or sites can be combined; an integrated multi-site project must use one application.
Eligible costs and limits. Only agreed, direct costs incurred within the project period qualify, and work must not start before both parties accept the grant agreement. The rules in place at application govern the project. The Program Delegate, the department's responsible programme manager, makes final cost-eligibility decisions.
The cost rules cover qualifying new equipment, enabling works such as switchboard upgrades, modifications to an asset the applicant owns, directly related training and knowledge sharing, and work to obtain approvals during the project. Government approval fees are excluded. Contingencies are limited to 10% of eligible project costs and paid only against actual expenditure. The required independent financial audit can count up to 1% of total eligible expenditure.
Plant used as an input, tool or infrastructure to carry out the project has separate accounting rules: purchased or constructed plant counts through depreciation—the allowed decline in asset value—for its project use, rather than automatically through its full purchase price. Eligible higher depreciation for heavy use must follow Australian Taxation Office rules. Hire and lease costs are proportional to project-use periods; financed purchases exclude interest and use depreciation. Specific leasehold improvements must be capitalised and depreciated. Verifiable plant running costs have the limited eligibility described in Appendix A; constructed-plant running costs qualify only once it is complete.
Direct employee labour is limited to actual project work and a remuneration ceiling of AUD175,000 per financial year, reduced proportionally for shorter periods. Project-management labour is limited to 10% of eligible labour costs; leadership and administrative staff costs are excluded even when they manage the project. Up to 30% of eligible salary costs can be added for permitted employment costs and related overheads. Contractors need written terms before work starts and itemised cost evidence. Necessary domestic project travel is limited to reasonable accommodation and transport, with flights capped at the equivalent economy fare.
Payment and obligations. Payments follow an agreed schedule and satisfactory progress; at least 10% of the grant is held until an acceptable final report and completion of outstanding obligations. The grant ceiling does not increase. Government-related entities' grant payments do not attract GST; elsewhere GST is added where applicable, and the grant is assessable income unless tax law exempts it. Payment must go to the applicant's account at an Australian financial institution.
Recipients must keep cost evidence, provide progress and final reports, recent energy bills and a case study, and share learning with other councils and similar commercial facilities. The sample agreement requires an independently audited financial statement verifying grant spending within 90 days after project completion and retention of records for five years. Evaluation may continue for two years after completion. Variation requests must be made in writing before the project ends and need approval; shifting funding between financial years depends on available funds and can otherwise reduce the grant. Misspent or surplus funds can be recovered, with interest on overdue repayments.
The sample agreement also requires appropriate insurance and makes the recipient responsible for compensating the Commonwealth for activity-related claims, loss or damage, reduced to reflect Commonwealth fault. Recipients keep intellectual-property ownership but give the Commonwealth a permanent licence, without licence fees, to use, adapt, publish and sublicense required reports and their incorporated materials for government purposes, excluding commercialisation; that licence does not extend to other project-created materials. Public grant announcements need prior written approval and funding must be acknowledged.
Eligibility
Applicants need an active Australian Business Number and must be a local-government body or a joint or regional local-government organisation with its own ABN and only local-government bodies as members. The statutory definition includes state-law local governing bodies, excluding bodies whose sole or principal function is a particular service such as electricity or water supply, and bodies formally declared eligible by the Minister on state-minister advice.
The named eligible bodies also include the Australian Capital Territory; Anangu Pitjantjatjara Yankunytjatjara; Maralinga Tjarutja; Gerard Community Council Aboriginal Corporation; Nipapanha Community Aboriginal Corporation; Yalata Community Council Incorporated; Cocos (Keeling) Islands Shire Council; Lord Howe Island Board; Norfolk Island Regional Council; Outback Communities Authority; Shire of Christmas Island; Silverton Village Committee Incorporated; and Tibooburra Village Committee Incorporated.
At application, the existing facility or building must be owned, managed or leased by local government. Council-owned buildings tenanted by others qualify. Successful Round 1 applicants are excluded from Round 2, including every party to a successful Round 1 joint application. Separately, applicants that are members of a separate joint local-government body application in Round 2 are ineligible. Applicants and project partners must not be on the National Redress Scheme list of institutions where sexual abuse occurred that have neither joined nor signalled an intention to join. Employers with at least 100 employees must comply with the Workplace Gender Equality Act; the application also requires a declaration that the applicant is not named as non-compliant by the Workplace Gender Equality Agency. Applicants, partners and activities must comply with Australian sanctions.
Projects must reduce costs and emissions through upgrades to existing facilities or operations. Fossil-fuel efficiency projects, generation or storage outside the customer utility meter on the transmission or distribution-network side (front of meter), off-grid remote-area power supplies and vehicle purchases are excluded. Energy upgrades must use electricity or solar thermal, although backup fuel capacity such as a diesel generator can be permitted. New energy infrastructure rather than an existing upgrade is excluded, with an explicit exception for new EV charging.
Other excluded expenditure includes research, feasibility studies and energy audits; already-supported activities, equipment or supplies; pre-agreement costs; in-kind contributions; financing and interest; compliance costs for Victorian Energy Efficiency Certificates, NSW Energy Savings Certificates and Small-scale Technology Certificates; insurance, land, recruitment and contract-negotiation costs; unrelated assets or training; application, report and variation preparation except required independent audits; and overseas travel. Overseas costs need the Delegate's approval. Routine operations, maintenance, general administration and ongoing ICT subscriptions are excluded except for the expressly permitted Appendix A costs and overheads described above. The exclusion list is not exhaustive and the Delegate can specify additional cost treatment.
Recipients must obtain relevant planning/building approvals and comply with electrical and workplace safety rules. Energy audits must meet AS/NZS 3598:2014, the required standard for the energy-use assessment. Where children are involved, legal screening requirements and the sample agreement's child-safety principles, annual risk assessment, staff training and compliance reporting apply. Work involving vulnerable adults requires police checks and permits; serious offence records bar participation, while other criminal/court records require a documented acceptable-risk assessment.
How to apply
- Status
- lukket
- Åbner
- Lukker
- Vilkår for ansøgningsrunden
- Round 2 is closed.
- Maximum project duration 24 months; complete by 31 March 2028.
Round 2 opened on 4 March 2025 and closed on 13 June 2025 at 17:00 AEST. Applications are currently closed; the official page retains the guidelines, sample agreement and application form for reference.
During the round, applicants used the online portal, with one application per round and no late submissions. Required material included a project plan and detailed budget, delivery and risk-management arrangements, relevant technical evidence where applicable, and the completed official abatement calculator. The calculator quantifies energy savings, emissions reductions and load flexibility; supporting plans must explain access to necessary assets and permissions. Applications and expenditure need approval from the applicant's authorised governing body or representative, and conflicts of interest must be disclosed.
Competitive assessment requires at least 50% against each of four criteria: emissions reduction or load flexibility (30 points), wider impact (20), delivery capability and resources (30), and economic/social benefits (20). Meeting these scores does not guarantee funding. Financial, legal, governance and national-interest checks can affect selection. The Department of Industry, Science and Resources administers the programme for the Department of Climate Change, Energy, the Environment and Water; the latter's senior responsible officer makes the final funding decision, with no merits appeal.
Successful applicants ordinarily have 30 days from the written offer to execute the binding grant agreement, unless an extension is granted. Do not start work before both parties have accepted it. The general grant terms cannot be negotiated away, and breach can lead to recovery of funds. The official contact route is business.gov.au or 13 28 46.