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AU Financial Review
12 hours ago
- Business
- AU Financial Review
Energy-as-a-service lowers power costs without capital outlay
The service provider handles everything from installation to maintenance, allowing businesses to enhance energy reliability and efficiency, while remaining focused on their core operations. Origin, in partnership with engineering and technology firm Climatech Zero, is aiming to help businesses make this transition. 'Energy-as-a-service is an innovative option now available to businesses,' says James Magill, executive general manager at Origin Zero. 'The benefit for them is the guarantee of energy savings and that the company providing the energy service is there throughout the journey, rather than just going to a site, fixing or fitting something and leaving.' 'Costs are reduced and then smoothed out for the business and the risk is on the provider of the energy-as-a-service, allowing businesses to focus on their core operations. ' Many of the financial advantages of this approach are the result of shifting spend from capital expenditure to operational expenditure, with businesses paying a fixed monthly or annual payment spread out over the length of the service. This contrasts with the traditional model of upfront equipment purchases plus ongoing maintenance costs. Instead of buying and maintaining compressed air systems, for example, a manufacturer could pay a fixed fee for guaranteed compressed air volume, with the service provider handling all equipment and maintenance. 'We're accountable for delivering results and the customer only pays for the performance they receive, which removes the risk for the customer,' Magill says. Visy – an industry-leading, Australian-owned packaging and recycling company – has worked in partnership with Climatech Zero since 2019 on a range of energy initiatives, which has delivered 13 projects across 11 sites. Sustainability is central to Visy's operations, with this partnership helping Visy meet its energy, emissions, production and financial goals. Discussions around the energy-as-a-service model began in 2023, initially focused on compressed air systems, with Visy rolling out its first two sites in 2024. 'After partnering with Climatech Zero for its energy-as-a-service model for our compressed air assets, we've seen fantastic energy efficiency improvements of more than 25 per cent in the power required to deliver our compressed air needs,' says Ryan Santowski, Visy's group general manager – energy, waste and water. 'Our reliability has improved, allowing us to focus more on what we do best, Australian manufacturing. We've seen the energy-as-a-service model provide high asset reliability, combined with high energy improvements.' Climatech Zero, in which Origin has a 20 per cent equity stake, provides tailored engineering solutions for industrial customers that complement Origin's capabilities in grid-scale and on-site energy solutions. The partnership will help the companies deliver end-to-end energy and decarbonisation strategies for businesses. 'Origin brings deep expertise in both behind-the-meter and in front-of-the-meter services, including solar, demand response and market integration,' says Climatech Zero co-founder and managing director, Peter O'Connell. 'We focus on optimising the mechanical systems and controls that drive industrial energy use,' says Climatech Zero co-founder and managing director.' 'There's a big energy efficiency opportunity for Australia and we're excited to be part of this transition.'
CBS News
11-03-2025
- Business
- CBS News
How much does a $200,000 HELOC cost per month in 2025?
Home equity line of credit (HELOC) rates continue to drop in 2025, hitting two-year lows and giving homeowners rates that are nearly one percentage point lower than they were in March 2024. Not only have rates declined over the past few months, but home equity levels are on the rise. In fact, the average homeowner has an average of $313,000 in equity, which is 6% higher, year-over-year. With plenty of equity in their home (on average) and low HELOC interest rates, homeowners looking for funding are in a good position to borrow money from their equity — even six-figure amounts such as $200,000. HELOCs provide an affordable way to do that, offering a revolving line of credit you can borrow from as needed (up to your limit) at rates that are lower than home equity loans, personal loans and credit cards right now. If you've got big expenses coming up or a plan requiring a six-figure sum and need to access $200,000 from your home's equity, it helps to first know what the monthly payments on a $200,000 HELOC could cost if applied for now. Below, we'll do the calculations. See how low your HELOC rate could be here. How much does a $200,000 HELOC cost per month in 2025? When you're making a financial decision about a six-figure sum of money, it's crucial to understand how much it will cost each month to borrow. This can be difficult to determine with a HELOC since it has a variable rate subject to change over time. Still, calculating potential costs as today's rates can help give you a rough estimate of what to expect. Here's what you can expect to pay monthly in 2025 for a $200,000 HELOC at today's rates (assuming rates are constant): 10-year HELOC at 8.06%: $2,432.90 15-year HELOC at 8.06%: $1,918.24 To demonstrate the cost-effectiveness of borrowing with a HELOC now, here's how much a $200,000 HELOC would've cost monthly at rates from March 2024 (assuming rates were constant): 10-year HELOC at 8.99%: $2,532.43 15-year HELOC at 8.99%: $2,027.34 So, today's rates for 10- and 15-year $200,000 HELOCs are around $100 per month compared to rates from one year ago but those payments could become even cheaper soon if the downward trend in HELOC rates continues. Find out how much home equity you can borrow here. Should you borrow $200,000 worth of home equity? With such a large amount of money at stake, it's important to consider if it's worth it to take out a $200,000 HELOC. Real estate agent James Magill, owner of Area 361 Hospitality, a commercial real estate firm, says he often sees homeowners use HELOCs for pool installations, a move that can be worth it since pools tend to increase home values and give a boost to your quality of life. However, he generally cautions against using a HELOC for something that isn't going to produce a return, such as a boat or RV. "Essentially, it's not great to create more debt for recreational vehicles or something that isn't producing any income or reducing your overall debt-to-income ratio," Magill says. "I wouldn't recommend increasing your debt-to-income ratio on something that isn't going to give a return on your investment." Because there's such a large amount of money at stake with a $200,000 HELOC, you have to be sure you can afford your monthly payments, notes Matthew Teifke, principal at TR3 Capital, a residential property management firm. "[You have to] have some kind of additional income to pay for that monthly payment," Teifke says. "It comes down to being able to afford it through a secure investment or another source of income." If you're considering using your HELOC to start a small business or fund an investment opportunity, don't go in blindly. Use the money for an opportunity you're familiar with, Teifke says. "Be competent in the investment you're looking at," he says. "Don't jump into a tech startup if you haven't done that before. If you know real estate, look at investing in an apartment complex. It can go bad fast, so be very diligent [about] where you're putting the money and why." The bottom line Taking out a $200,000 HELOC requires a clear sense of what your monthly borrowing costs will be, what you'll use the money for and how you plan to pay the money back. Keep in mind that HELOCs have two phases: draw and repayment. During the draw period, you can withdraw money from your line of credit but will usually be required to make monthly interest-only payments. Once your draw period ends, you're required to make monthly payments on your principal and interest, which means your monthly payment will increase considerably.
