The government’s commitment for the UK to become net carbon neutral by 2050 has put greater pressure on domestic consumers, businesses and public sector organisations to radically reduce energy consumption.
Improved technology is allowing organisations to modernise dated infrastructure and systems and thereby minimise their future energy costs. In fact, a growing number of organisations are finding that investments in modern technology and renewables that are at the cutting edge of carbon reduction, can offer improved workspaces that significantly reduce energy consumption and costs in turn.
But many organisations are challenged to finance the upfront costs for such improvements. It means that, all too often, investment in energy efficient technologies and infrastructure becomes a reactive activity, with updates and replacements taking place when they reach the end of their life. Taking a proactive approach to systematically replacing and updating inefficient equipment, systems and buildings, however, will offer immediate reductions in maintenance and energy costs.
What if there were a way to fund energy efficient projects without having to find a large capital expenditure upfront?
In recent years, the government has sought to address the need to reduce carbon emissions in the public sector with the introduction of schemes that provide funding for energy efficient projects.
Salix Energy Efficient Loan (SEEL and SEEF)
The Salix Energy Efficient Loan provides an interest free loan for the purpose of installing modern, energy efficient technologies in place of dated, inefficient technologies. All public sector organisations, including schools; higher and further educational institutions; emergency services; hospitals; leisure centres; local authorities; and the NHS, are eligible for Salix funding. The objective of the scheme is to provide a net financial benefit to the school, with the loan being repaid by the associated reductions in energy costs. Funding is subject to maximum payback periods of up to eight years for schools, and up to five years for all other public sector organisations.
Switching to Low Energy (SLE)
The Switching to Low Energy programme provides an energy survey to local authorities and maintained schools in association with the Salix fund. The aim is to allow schools to identify how to reduce their energy consumption through energy efficiency projects and behavioural changes. The survey provides a business case for a Salix Energy Efficient Loan.
Condition Improvement Fund (CIF)
The Condition Improvement Fund (CIF) provides funding to academies, sixth-form colleges and non-diocesan VA schools via an annual bidding round. Successful bidders receive a non-repayable grant to allow them to address significant areas of poor building condition. The fund also supports a small proportion of building expansion projects to academies, sixth-form colleges and non-diocesan schools with an Ofsted rating of ‘good’ or ‘outstanding’ that demonstrate a need to expand. The 2019/2020 bidding round closed in December 2019. The next round will open November 2020, so it is worth preparing now.
What is the opportunity?
The development in modern energy saving technology is offering huge potential for organisations to reduce their energy consumption and associated costs. More than one hundred technologies are supported by the funding programmes wide ranging in complexity and cost to implement.
Improvements can be funded in anything from LED lighting; building management systems; hand dryers; insulation; renewable energy; ventilation; computers and IT solutions; industrial kitchen equipment; boiler upgrades; and cooling systems, to name a few. A simple audit of your premises will identify when and where you are using the most energy in order to help identify suitable opportunities.
Funding in action: Queen Mary University of London saves £4,000 per month with energy efficient lighting
Queen Mary University of London, one of the UK’s leading research-focused higher education institutions, was awarded a Salix fund for investment in energy and carbon saving projects. The university wanted to use the fund to realise savings from replacing inefficient lighting in its library. One of the project’s objectives was that the library was lit suitably to create a suitable environment for study and user comfort.
The existing T8 fluorescent tube lights were replaced with energy saving LED alternatives. In the bookshelf aisles, passive infra-red (PIR) controls were installed to avoid the continuous lighting of areas that were only intermittently unoccupied. Careful phasing of the work meant that it was completed during the holidays, while the library remained operational throughout the work taking place.
The project exceeded business case projections, with the new lighting enabling the university to realise a 70 per cent saving in energy consumption, equating to more than £4,000 per month.
How to secure funding
These funding programmes are increasingly popular and oversubscribed as a result. Since one of the key criteria is return on investment, careful consideration should be given to those technologies that will provide the necessary return on investment to enable organisations to maximise the savings. This is particularly relevant for Salix, considering the need to meet the repayment deadline before any savings can be realised.
Ed Horgan, Director of Technical Services at Briar Associates, part of the Zenergi Group, has extensive experience of securing funding for public bodies. He suggests that engaging specialist services at the outset will help to identify the most suitable projects to better your chance of securing funding, and says: “Working with a specialist firm will allow the design and tendering for project work to develop seamlessly from the initial audit right through to securing the funding and delivering the project in full, for a faster return on investment.”