Interest-free loans stimulate energy efficient refurbishment

Published:  08 December, 2009

Financing energy savings — Hugh Jones.

Energy-efficient refurbishment can be made to pay for itself from day one, as Hugh Jones explains.

Building was one of the first industries to make the connection between the low-carbon economy and cost reduction. Particularly in the downturn, energy efficiency is a key way for businesses to make both immediate and long term cost savings. We’ve seen a real increase in the number of building-services companies that are applying for our range of services — from basic carbon surveys, to interest-free loans for energy-saving equipment, to strategic carbon management.

With just a few simple steps, building-services engineers across the UK can save considerable amounts of money annually, without necessarily needing to invest in new technologies to start reducing energy costs and carbon emissions from buildings.

Of particular interest to small and medium-sized building and construction firms is the Carbon Trust’s interest-free loan scheme, which enables businesses to replace old, inefficient equipment, such as lighting, heating and air conditioning, for new energy-saving models. The loans provide interest-free funding up to £400 000 and are paid off by the energy savings they provide over one to four years. Some of the most popular equipment replacements in the first six months of 2009 have collectively achieved the following savings for UK small and medium-sized businesses.

• New energy efficient lighting and lighting controls provided UK businesses with annual savings of nearly £1 million.
•Energy-efficient heating installations provided annual savings to UK businesses of nearly £230 000.
• Air conditioning replacements provided UK businesses with annual energy savings of over £60 000.

Despite the availability of interest-free loans to replace old equipment, many UK property and construction firms are forcing themselves to ‘make do and mend’ with old, inefficient equipment. Recent Carbon Trust research of UK property and construction firms found that 43% do not have the cash to upgrade old equipment, and 60% wait until their equipment breaks down completely before replacing it — by which time energy efficiency is clearly at a minimum. The problem is costing small and medium-sized property and construction firms £320 million a year in wasted energy.

Financing your energy efficient refurbishment

With £100 million in interest-free loans available from the Carbon Trust, making buildings more energy efficient is a no brainer for businesses.

For example, North London based Mastmead Ltd, a company that offers 88 business units for rent as office space, took an energy-efficiency loan of £53 715 to replace all of the windows in its building. The company's energy bill has fallen by 28% — over £24 000 a year.

Office-space provider Boon & Sons used a £5200 interest-free loan to install fast-reacting motion sensors to provide light when clients require it, without wasting energy and money lighting unoccupied areas. Since installing the sensors, the company has made annual savings of £3600 in its energy bill.

Many building-services engineers are already realising the cost savings available by introducing energy-saving measures throughout the refurbishment process. If the building-services industry is to play a key role in the recovery from the downturn and the fight against climate change, improving energy efficiency is a vital part of the journey.

To find out more about the Big Business Refit loans scheme, visit the web address below.

Hugh Jones is director of solutions at the Carbon Trust.



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