At present, we can help SMEs secure up to 30 percent capital grants and funding for projects we deliver. Qualifying energy saving projects are eligible for a capital contribution of up to 30 percent of the project cost, up to a maximum of £10,000, from the Carbon Trust’s Green Business Fund.
Businesses can claim this money against energy efficiency measures for their business practices and operations.
Grants can be used to cover the cost of materials or equipment and associated operations.
Costs such as marketing, consultancy, equipment, IT software, R&D/development are all available under the scheme.
What Projects Qualify?
Capital contributions are currently available for Energy Reduction Solutions including LED Lighting, Voltage Optimisation, Motor Optimisation, aM&T (Automatic Metering & Targeting), Heating, ventilation & air conditioning (HVAC), Power supply and storage, Solar PV, Solar thermal, Water-saving technologies, Waste reduction technologies and BMS Controls.
The fund has been available since April 2016 and is offered on a first come, first served basis. This could mean you could receive up to £10,000 towards the cost of your energy saving project to help meet the challenges of becoming a more sustainable business whilst reducing your energy consumption and saving money on an on-going basis.
Who is eligible?
Small and medium-sized businesses, schools, charities and voluntary organisations are able to apply for a capital contribution towards the cost of their energy saving project. To be eligible, organisations must meet certain criteria including:
- Have fewer than 250 employees
- Turnover of less than £25m
- £5,000 minimum project size to be delivered by a Carbon Trust Accredited Supplier
- The 30% capital grant is available with a limit of £10,000 per projects. Therefore a project with a total cost of £40,000 would qualify for a green business fund grant to the tune of £10,000 and the net cost would only be £30,000.
It Sounds Complicated?
Well it can be, but Energy Efficiency Services are here to help its customers through the application process and provides all the necessary technical information and documentation required for a successful application.
Our partnership with our tier 1 finance solution provider DLL (fully owned subsidiary of Rabobank Group) allows us to offer flexible finance solutions for our clients for funding energy efficiency projects, we can tailor the financial solution to meet with your requirement and fall within your business strategy.
For many of our projects, the cost of finance can be met from the energy savings delivered by the project and still leave residual savings to your bottom line.
Where projects can be funded from the savings achieved, many of the budgeting obstacles around capital expenditure can be overcome allowing the business to reap the benefits from new technology, cost savings and to become more environmentally sustainable.
What benefits does a structured finance solution deliver?
- Upfront VAT Reclaim.
- ECA – Tax deduction on Enhanced Capital Allowances.
- Finance secured on energy solution asset NOT against business.
Enhanced Capital Allowance (ECA)
Enhanced Capital Allowances (ECAs) are a straightforward way for a business to improve its cash flow through accelerated tax relief.
The ECA Scheme for Energy Saving Technologies encourages businesses to invest in energy-saving plant or machinery specified on the Energy Technology List (ETL) which is managed by the Carbon Trust on behalf of Government.
The ECA scheme allows businesses to write off the whole cost of the equipment against taxable profits in the year of purchase. This can provide a cash flow boost and an incentive to invest in energy-saving equipment which normally carries a price premium when compared to less efficient alternatives. The ETL specifies the energy-saving technologies that are included in the ECA scheme.
As an example if your business pays corporation or income tax at 20%, every £10,000 spent on qualifying equipment would reduce its tax bill in the year of purchase by £2,000.
In contrast, for every £10,000 spent, the generally available capital allowance for spending on plant and machinery would reduce your business’s tax bill in the year of purchase by £360. In other words, an ECA can provide a cash flow boost of £1,640 for every £10,000 it spends in the year of purchase.
What equipment qualifies?
The full list of qualifying equipment with over 16,000 energy-saving products can be found at https://www.gov.uk/etl , however some of the most effective technologies include Automatic Monitoring and Targeting (AMT) systems, lighting equipment, pipe work insulation and air source split and multi-split heat pumps, VSD (variable speed drives) and HVAC equipment to mention but a few.